- 3 -
On that tax return, petitioner showed the income items set forth
in table 1.
Table 1
Tax return
(Form 1040)
line Item Amount
7 Wages $4,275
8a Taxable interest 7,922
12 Business income or (loss) (3,703)
13 Capital gain or (loss) (2,858)
22 Total income 5,636
The “Business income or (loss)” item listed in table 1 was
the loss from a Schedule C, Profit or Loss From Business, sole
proprietorship, which consisted of petitioner’s providing
cleaning and lawn mowing services.
Respondent does not dispute the correctness of any item
shown on petitioner’s tax return, except the amount of the
standard deduction and consequential items--taxable income and
tax liability.
Discussion
The Statute
In general, section 63 provides that taxpayers are entitled
to the “standard deduction” if they do not elect to itemize
deductions in calculating their taxable income. For our
purposes, the standard deduction is the “basic standard
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