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5. 1998 Charitable Contribution Deduction
Petitioners claimed a charitable contribution deduction of
$3,664. Respondent disallowed $3,144 of the claimed deduction.
Respondent concedes that petitioners are entitled to an
additional deduction in the amount of $250. There is no
evidence that supports any additional deduction.
6. 1998 Tax Return Preparation and Legal Fees
Petitioners claimed a miscellaneous deduction of $864 for a
tax return preparation expense. Respondent disallowed $150 of
the amount claimed. There is no evidence that supports any
additional deduction.
Petitioners claimed a deduction of $500 for legal fees.
Respondent disallowed the deduction. There is correspondence in
the record between John R. McCabe, an attorney representing
petitioner, and the Corps concerning the value of the property
purchased by the Corps discussed above.
Discussion
1. 1997 Income
Petitioners do not dispute that there was income resulting
from the exchange of the house and property for the discharge of
the mortgage indebtedness. See sec. 61(a)(12). They question,
however, the determination by the Corps that the fair market
value of the property was $85,000 at the time of the transfer.
Respondent adopted the determination of the Corps. The
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