Juan G. Ibarra and Margarita Ibarra - Page 4

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               Gross income                                 $7,140                    
               Expenses:                                                              
               Car and truck                 $2,031                                   
          Commissions and fees           1,048                                        
          Insurance                        250                                        
          Seminary and convention        1,550                                        
          Robes, oils, incense, and                                                   
          special gear                 1,205                                          
          Educational, books,                                                         
          publications, and software   2,887        8,971                             
               Net loss                                    ($1,831)                   

          On Schedule A of their return, petitioners claimed the following            
          itemized deductions:                                                        

               Medical                         $5,817                                 
               Less 7.5% of adjusted                                                  
          gross income                  (2,060)        $ 3,757                        
               Real estate taxes                                  753                 
          Home mortgage interest                           4,815                      
               Charitable contributions:                                              
          Cash                           $4,650                                       
          Other than cash                   500           5,150                       
               Unreimbursed employee expenses  $6,588                                 
          Less sec. 67(a) 2% floor          549           6,039                       
               Total itemized deductions                      $20,514                 

               All the adjustments by respondent in the notice of                     
          deficiency relate to Schedules A and C of petitioners' return.              
               With respect to the Schedule A itemized deductions,                    
          respondent determined that the medical and dental expenses                  
          substantiated by petitioners totaled $1,295.  Since that amount             
          did not exceed 7.5 percent of petitioners' adjusted gross income            
          as required by section 213(a), petitioners were not entitled to a           






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