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The issues for decision are: (1) Whether petitioner is
entitled to deductions for “business promotion” expenses in
excess of the amounts allowed by respondent; (2) whether
petitioner is entitled to deduct amounts representing the
repayment of loan principal; and (3) whether petitioner is liable
for the penalties under section 6662(a).1
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Burlingame, California, on the date the petition was filed in
this case.
Petitioner is an insurance broker and operates a business
named Osborne Insurance Agency. The business is operated as a
sole proprietorship; there is no legal entity separate from
petitioner himself, such as a corporation, limited liability
company, or partnership. Petitioner filed a Schedule C, Profit
or Loss from Business, in each of the years in issue for the
business.
The first issue for decision is whether petitioner is
entitled to deductions for “business promotion” expenses in
excess of the amounts allowed by respondent.
1Petitioner concedes respondent’s adjustments to his
deductions for taxes and licenses. Respondent’s adjustments to
the amounts of self employment income tax, and the deductions
therefor, are computational and will be resolved by the Court’s
holding on the issues in this case.
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Last modified: May 25, 2011