Wing Y. Kwan - Page 7

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          equipment.  This Court ruled in Kwan v. Commissioner, T.C.                  
          Summary Opinion 2002-16, that petitioner was not entitled to any            
          section 179 expense deduction for 1997 with respect to computers            
          and computer equipment.  Nevertheless, petitioner carried over              
          $1,616 as a “deduction for 1997.”  This is improper on its face.            
          Petitioner had a collection of computer and computer equipment              
          receipts.  Respondent allowed petitioner a deduction of $1,465 on           
          this issue.  Petitioner did not show any credible business reason           
          for the purchase of an additional computer and computer equipment           
          to satisfy the requirement that the expenses were ordinary and              
          necessary.  In any event, because petitioner had no taxable                 
          income from a trade or business, he is not entitled to a section            
          179 deduction.  Sec. 179(b)(3)(A).  Accordingly, respondent’s               
          determination on this issue is sustained.                                   
               Respondent also allowed $2,200 of the $6,600 claimed as rent           
          expense and disallowed the remaining $4,400 because petitioner              
          did not establish that that amount was an ordinary and necessary            
          business expense paid in 1998.  Petitioner placed in evidence one           
          lease running through March 31, 1998, which we assume continued             
          on a month-to-month basis through August, and another lease for             
          the remainder of the year.                                                  
               Petitioner admitted that there were other businesses that              
          used the address covered by the second lease.  Petitioner did not           
          prove that he paid all the amounts in issue.  Nor did he provide            






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