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Item 1997 1998
Home mortgage interest $7,791 $5,266
Real property tax 600 600
DMV renewal fees 39 39
Petitioner, on the 1997 and 1998 Federal income tax returns,
claimed that he was entitled to report income and expenses on a
Schedule C because he was a “statutory employee” in accord with
Rev. Rul. 90-93, 1990-2 C.B. 33. Petitioner reported gross
receipts of $45,700 for 1997 and $42,940 for 1998 (the amounts
reflected on the Forms W-2) on Schedule C of each return.
Petitioner, for 1997 and 1998, reduced gross receipts by $6,170
and $6,012, respectively, as cost of goods sold. On each return,
petitioner claimed that the cost of goods sold was an inventory
adjustment for stale and promotional goods.
On the Schedules C for 1997 and 1998, petitioner claimed the
following deductions from gross income:
Claimed deduction 1997 1998
Car and truck expense $1,890 $2,295
Legal and professional 800 750
Insurance 1,200 -0-
Interest 3,615 5,361
Other 703 1,788
Respondent disallowed all of petitioner’s claimed Schedule C
deductions for lack of substantiation.
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