Harold A. Lange - Page 7

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          the mortgage loan being replaced, and various closing costs                 
          totaling $948.95, described on the settlement sheet as follows:             
               Loan origination fee 0.218%             $167.00                        
               Appraisal fee                           250.00                         
               Flood                                   17.00                          
               Attorney's fees                         391.00                         
               Recording fees                          32.00                          
               State tax/stamps                        87.95                          
               Computer filing fee                     4.00                           
               On Schedule A of the 2000 Form 1040, petitioner claimed an             
          itemized deduction for "closing costs on house" of $1,367.73, a             
          figure which closely approximates the $1,371.73 total of the                
          foregoing payments.4                                                        
               Notice of Deficiency                                                   
               After the 2000 Form 1040 was referred to three units of                
          respondent, a notice of deficiency was issued to petitioner for             
          the 2000 taxable year in which it was determined that petitioner            
          had failed to file a return and had taxable income of $39,831,5             
          resulting in a deficiency of $8,301 and additions to tax under              
          section 6651(a)(1) for failure to file and section 6654 for                 
          failure to pay estimated tax.  Petitioner timely filed a petition           
          for redetermination.                                                        




               4 The $4 discrepancy is not explained in the record.                   
               5 This taxable income figure represented gross income of               
          $46,306 from pension distributions, Social Security benefits and            
          gambling winnings, less the standard deduction and a personal               
          exemption.                                                                  




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