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Respondent determined a deficiency in petitioner’s Federal
income tax of $17,632 for the taxable year 1998.
The issues for decision are (1) whether petitioner is
entitled to deduct as a business expense the cost of a double-
wide manufactured home which he purchased for a former
girlfriend/employee and for his two children, and (2) whether
petitioner is entitled to deduct certain legal expenses as
business expenses.1
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Campton, New Hampshire, on the date the petition was filed in
this case.
Petitioner operates a general contracting business as a sole
proprietor under the business name of R.G. Tuck Builders. In
late 1992, petitioner and Lisa Brownell (Ms. Brownell) began both
a business relationship and a personal relationship. Ms.
Brownell worked in petitioner’s office handling matters related
to petitioner’s general contracting business, as well as certain
rental apartments. Ms. Brownell earned wages of $105 per week,
and petitioner reported her wages on Forms W-2, Wage and Tax
Statement. Petitioner and Ms. Brownell resided together during
1Petitioner does not dispute any other adjustments in the
notice of deficiency.
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