Michael H. Visin and Natalie Marselly - Page 2

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               After a concession by petitioners,1 the issues for decision            
          by the Court are as follows:                                                
               (1) Whether for each of the years in issue, petitioners’               
          deduction for the business use of their apartment is subject to             
          the limitation on deductions set forth in section 280A(c)(5).2              
          We hold that it is.                                                         
               (2) Whether for 1998, petitioners are entitled to expense,             
          rather than depreciate, the cost of computer equipment and                  
          software.   We hold that they are not.                                      
               An adjustment to petitioners’ self-employed health insurance           
          deduction under section 162(l) is a mechanical matter, the                  
          resolution of which is dependent on our disposition of the                  
          disputed issues.  See sec. 162(l)(2)(A).                                    
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated, and they are so                
          found.  Petitioners resided in San Francisco, California, at the            
          time that the petition was filed with the Court.                            
               During 1997 and 1998, the taxable years in issue, petitioner           
          Michael H. Visin was self-employed as an interior decorator and             

               1  At trial, petitioners did not contest, and are therefore            
          deemed to have conceded, an adjustment in the amount of $703 to             
          cost of goods sold for 1997.                                                
               2 Unless otherwise indicated, all section references are to            
          the Internal Revenue Code as in effect for 1997 and 1998, the               
          taxable years in issue, and all Rule references are to the Tax              
          Court Rules of Practice and Procedure.                                      

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