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POWELL, Special Trial Judge: This case was heard pursuant
to the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed.1 The decision to be
entered is not reviewable by any other court, and this opinion
should not be cited as authority.
Respondent determined deficiencies in petitioners’ 1995 and
1996 Federal income taxes of $5,940 and $5,354, respectively.
Respondent also determined that petitioners are liable for
negligence penalties under section 6662(a) for 1995 and 1996 of
$1,188 and $1,070.80, respectively.
The issues are whether petitioners are (1) entitled to
deduct losses on Schedule C, Profit or Loss From Business, for
the years in issue arising from a used-car activity of petitioner
Claude D. Mayo, Sr. (petitioner); (2) entitled to deduct greater
medical and mortgage interest expenses than the amounts allowed
by respondent; and (3) liable for the negligence penalties under
section 6662(a) for 1995 and 1996. At the time the petition was
filed petitioners resided in Moneta, Virginia.
The relevant facts may be summarized as follows. During
1995 and 1996 petitioners reported income from interest,
1 Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the years in
issue, and Rule references are to the Tax Court Rules of Practice
and Procedure.
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Last modified: May 25, 2011