- 2 -
Respondent determined a deficiency of $13,363 in
petitioners’ Federal income tax for 2000 and an accuracy-related
penalty under section 6662 of $2,672.60. Petitioners concede
that Johnny J. Young (petitioner) received wages of $36,000, and
self-employment income of $21,438. Respondent concedes that
petitioners have substantiated that the following $24,982 of
expenses were paid in the exercise of petitioner’s ministry: (a)
Automobile expenses of $7,000, (b) books of $3,000,
(c) advertising of $377, (d) office expenses of $5,000, and (e)
trips of $9,605. Respondent concedes that petitioners are
entitled to deductions for mortgage interest of $50,825 and
charitable contributions of $22,587. Respondent also concedes
that petitioners are not liable for the accuracy-related penalty
under section 6662. The issues remaining for decision are
whether petitioners: (a) Must allocate expenses incurred in the
exercise of petitioner’s ministry between exempt and nonexempt
income, and (b) have additional income subject to self-employment
tax.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received in evidence
are incorporated herein by reference. At the time the petition
was filed, petitioners resided in Los Angeles, California.
Petitioner was ordained as a minister by the Church of God
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011