Carl F. and Frances R. Butler - Page 15

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          to substantiate her claimed car and truck expenses.  Mrs. Butler,           
          however, provided the Court with a list of her purported business           
          expenses.  Also, included was a copy of a check made payable to             
          “WV Board of Respiratory Care” of $55.  We believe Mrs. Butler’s            
          testimony that she incurred other license expenses and continuing           
          education credits of $95 and $260.  However, when questioned as             
          to the amounts claimed for the remaining business expenses on her           
          Schedule C, Mrs. Butler’s testimony was vague.                              
               Furthermore, with regard to Mrs. Butler’s deductions for her           
          business use of her personal residence, section 280A is                     
          controlling.  Under section 280A, the general rule is that,                 
          except as provided by this section, no deduction is allowable               
          unless an allocable portion of the residence is exclusively used            
          as the principal place of any business activity conducted by the            
          taxpayer.  All deductions allowable to the business use of the              
          residence must be used to offset the amount of gross income from            
          the business activity and is subject to the 2-percent floor on              
          miscellaneous itemized deductions.  Sec. 280A(a), (c)(1), (c)(5).           
               We have taken into consideration Mrs. Butler’s testimony and           
          the handwritten list of claimed Schedule C expenses.  We conclude           
          that petitioners are entitled to a business deduction totaling              
          $410.  However, we cannot estimate any amounts for petitioners’             
          other business deductions under the Cohan rule.  Sec. 6001; sec.            
          1.6001-1(a), (e), Income Tax Regs.                                          






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