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$24,796 rather than $43,915, which would be the amount if the
$19,119 deduction for mortgage interest were included as a 1997
Schedule A deduction. In light of the 1997 Explanation of Items,
we view respondent’s stipulation that he “allowed on Schedule A *
* * interest in the amount of $19,119" as an admission that the
notice inadvertently and improperly failed to include that amount
in its computation of petitioner’s Schedule A deductions for
1997. That error necessarily results in an overstatement of
petitioner’s deficiency determination for 1997.5
B. 1998 and 1999
Respondent made two minor computational errors for 1998 and
1999.
Petitioner’s 1998 Schedule C lists total deductions of
$80,675. Both the notice and the agent’s Form 886-A for 1998
disallow the deduction of $80,765 of Schedule C expenses. On
account of that inadvertent transposition of numbers, the
deduction disallowance is $90 greater than the actual deduction.
In the notice, the computation of each year’s adjustment for
increased Schedule A deductions properly reduces Schedule A
deductions “per exam” by petitioner’s Schedule A deductions “per
5 Although the agent’s 1996-98 Forms 886-A, Explanation of
Items (the only three in evidence), permit Schedule A mortgage
interest expense deductions with respect to petitioner’s three
investment properties, the notice’s computation of Schedule A
deductions for 1998-2000 lists the additional interest expense as
“Home Interest Expense.” That mischaracterization, however, has
no impact on the deductible amounts.
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