- 3 - expenses deduction. Respondent disallowed $8,328 of the claimed employee benefit programs expense deduction, and instead allowed $4,996 for self-employed health insurance. Respondent disallowed the deduction for pension and profit-sharing plans expense in full. Respondent disallowed the deduction for other expenses of $5,371 and instead allowed a depreciation deduction of $1,301 for the computer and software. Respondent recharacterized the health insurance deducted as “employee benefit programs of $8,328" as an adjustment to gross income and allowed 60 percent of that amount or $4,996 as a deduction. Respondent disallowed $5,371 of the claimed “other expenses”. Section 162(a) allows a deduction for ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Taxpayers, however, must maintain sufficient records to establish the amount of the claimed deductions. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs. Section 274(d)(4) imposes stringent substantiation requirements for the deduction of certain listed property defined under section 280F(d)(4). Listed property includes, inter alia, automobiles and computers. Sec. 280F(d)(4)(A). To deduct expenses for such listed property, including depreciation, taxpayers must substantiate by adequate records the following items: The amount of each separate expenditure, the listed property’s business and total usage, the date of the expenditurePage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011