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Profit or Loss From Business, for his journalism activity.
Petitioner listed his six children as dependents on his 1999
return but claimed personal exemptions only for himself, Martin,
and Marlon. He also claimed three personal exemptions on his
2000 return. Petitioner attached to his 1999 and 2000 returns
Schedule EIC, Earned Income Credit, on which he listed Martin and
Marlon. However, he did not claim the earned income credit for
1999 and 2000.
1. Corrections to Petitioner’s 1999 Return
Because petitioner claimed exemptions for only two of his
children for 1999, respondent allowed petitioner a dependency
exemption for each of his four other children (Mark, Matthew,
Miranda, and Melanie). On the Schedule C attached to his 1999
return, petitioner reported gross receipts of $60,152, expenses
of $41,512, and net income of $15,918. Respondent corrected a
computational error in the amount of net income petitioner
reported, resulting in an increase of $2,722 and an increase in
petitioner’s self-employment tax of $1,509. Respondent also
increased the amount of petitioner’s self-employment tax
deduction. Petitioner claimed a $6,250 standard deduction for
head of household on his 1999 return. The correct amount for
1999 was $6,350. Respondent corrected that error. Respondent
also allowed petitioner an earned income credit of $2,791 for
1999.
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Last modified: May 25, 2011