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Petitioners resided in Cordova, Tennessee, at the time they filed
the petition.
Mr. Lam (petitioner) was self-employed during the years at
issue.3 Petitioner owned and operated two businesses during the
years at issue; an investment and insurance business, and a real
estate business. All the business income and expenses in dispute
relate to the operation of these two businesses.
Petitioner’s “major business” is the investment and
insurance business, in which petitioner, a certified financial
planner, provided clients investment services and sold insurance
products. Petitioner also is a licensed realtor and operated his
real estate business, Cordova Realty, as a “sideline.” Cordova
Realty’s business included renting, managing, and selling
properties.
I. Income Tax Returns for the Years at Issue
Petitioners filed joint income tax returns that petitioner
prepared, including detailed depreciation schedules. Petitioners
reported the income and expenses from petitioner’s two businesses
on Schedule C, Profit or Loss From Business.
A. Schedule C Deductions
Petitioners claimed deductions for, among other things,
repair and maintenance, supplies, bad debt, office, insurance,
3Mrs. Lam is a party to this case because she filed joint
returns with petitioner.
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Last modified: May 25, 2011