Jack H. Meyer - Page 4

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          withheld for 1998 as $3,120, and $730, respectively.                        
               Petitioner properly reported $50,334 of wage income and                
          $2,199 of Federal income tax withheld on his 1998 return.                   
          Petitioner claimed the $3,199.72 Social Security tax withheld and           
          the $729.91 Medicare tax withheld as a credit for excess Social             
          Security payments and as a credit for “other payment”,                      
          respectively, on his 1998 return.  Respondent disallowed these              
          purported credits.                                                          
               Petitioner filed a Schedule C for his machine shop activity            
          as part of his 1998 return.  During 1998, petitioner reported               
          gross income of zero with respect to his machine shop activity.             
          On his Schedule C, petitioner claimed the following deductions:             
                         Expense                      Amount                          
                         Car and truck                 $575                           
                         Depreciation                  4,859                          
                         Office expense                7,900                          
                         Rent or lease                 200                            
                         Repairs and maintenance       99                             
                         Taxes and licenses            876                            
                         Utilities                     295                            
                         Other expenses:                                              
                         Membership/Dues               30                             
                         Bank                          222                            
                         Trucking supplies, etc.       2,453                          
                         Trucking daily credit     10,255                             
                         Uninsured damages             2,082                          
                         Losses brought forward    13,532                             
          Total    43,378                                                             
               Respondent determined that all of the car and truck                    
          expenses, trucking supplies expenses, and uninsured damages were            
          employee business expenses incurred by petitioner as a cross-               






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