- 6 - Interest and Dividend Income, and D, Capital Gains and Losses, he listed all of the income items contained in the notice.4 On Schedule A, Itemized Deductions, of the 1988 return, petitioner listed the following itemized deductions: Real estate taxes $1,420 Deductible points (interest) 10,430 Total 11,850 On Schedule C, Profit or Loss From Business, petitioner listed his principal business as “Lawyer”, and, on a cash basis of accounting, showed zero gross receipts and total deductions of $6,724, for a net loss of $6,724. On Schedule E, Supplemental Income (plus attachments), petitioner listed nine separate rental properties. He reported a loss on each of the properties and, on four of the properties, he reported zero rental income. He reported a total loss of $29,455 with respect to said properties. Petitioner also claimed four personal exemptions: one for himself and one for each of three children. The combination of personal exemptions, itemized deductions, and losses resulted in petitioner’s reporting zero taxable income and zero tax due. In the notice, respondent allowed petitioner one personal exemption of $1,950 and the $3,000 standard deduction appropriate 4 In fact, petitioner double counted certain of the income items. Respondent has not sought to add the duplicated income to his proposed adjustment.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011