Wayne Payne and Dorene J. Payne - Page 18

                                       - 18 -                                         
          approximately equal to the amounts of his extras for that year,             
          but he did not look at either his personal return or HRDC’s                 
          return before signing them.                                                 
               The entire record does not support petitioners’ claim that             
          the extras were in lieu of rental income from HRDC.  Mr.                    
          Gunderson was not instructed on the issue when he prepared the              
          returns.  He was not aware that extras existed until a few days             
          before trial.  Mr. Payne did not look at his returns before they            
          were filed and was unclear and uncertain in his testimony                   
          regarding what he understood when he signed the returns.  The               
          extras Mr. Payne received in 1994 amounted to $45,060.50, almost            
          double the amount of rental income reported on petitioners’ 1994            
          personal return.  In addition, HRDC did not report the extras as            
          income.  Respondent properly reduced petitioners’ income by the             
          reported rental amounts, and neither HRDC nor petitioners are               
          entitled to claim deductions for rent paid (or the value of the             
          extras) in excess of those claimed on HRDC’s returns for 1993,              
          1994, and 1995.                                                             
               Petitioners also argue that because the Money Exchange                 
          charged a 2.5-percent fee each time they cashed a check there,              
          they are entitled to a deduction of 2.5 percent of Mr. Payne’s              
          extras.  We disagree.  The record shows that the Money Exchange             
          did charge 2.5 percent of the value of each check cashed as a               
          fee.  However, in order to claim a deduction, the fees must be              

Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011