- 4 - the wages she was paid by the City of New York and the wages she reported on her return. Respondent also allowed a $1,000 child tax credit, although no such credit was claimed on petitioner’s return. The income tax liability shown in the notice of deficiency is $646. When added to the computational reduction in the earned income credit ($2,380) that results from the increase in petitioner’s income, the deficiency amounts to $3,026. In April 2001, petitioner submitted an amended return to respondent. The amended return was not processed by respondent and none of the items reported on the amended return are taken into account in the notice of deficiency. The amended return includes a Schedule A, Itemized Deductions, on which the following deductions are claimed: (1) $1,111 for State and local income taxes, (2) $10,800 for home mortgage interest; and (3) $4,355 for gifts to charity. The amended return also includes a Schedule C, Profit or Loss From Business, on which gross income of $11,038 is reported, and the following expenses are deducted: (1) $1,284 for advertising; (2) $1,450 for commissions and fees; (3) $2,250 for rent; (4) $5,400 for repairs and maintenance; (6) $3,652 for supplies; (7) $3,254 for utilities; and (8) $7,366 for “other expenses”. When offset against the gross income reported on the Schedule C, the foregoing deductions result in the $13,738 net loss shown on that schedule.Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011