- 29 -
argues that petitioners are not entitled to deduct the remaining
expenses, including: (1) $909 of the $20,164 identified by
petitioners as “Opt.int” for “Merrill Lynch”; (2) $13,076 of the
$26,000 identified by petitioners as “US Bank Fees”; (3) $330,979
and $123,000, identified by petitioners as “Cash Pay” and
described as “Merrill Lynch, to protect Taxable income”; and (4)
$322,962, identified by petitioners as “Other” and described as
“Merrill Lynch, to protect Taxable Income”. Respondent raised
these matters in the amendment to answer, not in the notice of
deficiency, and now seeks an increased deficiency based in part
on these new matters. Therefore, respondent bears the burden of
proof with respect to these new matters. See Rule 142(a).
The “Opt.int” expense of $20,164 represents interest
petitioners purportedly paid on margin loans issued by Merrill
Lynch. Respondent concedes that petitioners are entitled to
deduct this type of expense as an itemized deduction. However,
respondent argues that a monthly account statement for
petitioner’s Merrill Lynch brokerage account shows that only
$19,255 was paid. The monthly account statement cited by
respondent shows that petitioner paid $19,255 in interest on
margin loans issued by Merrill Lynch during the month of August.
17(...continued)
of an individual, the miscellaneous itemized deductions for any
taxable year shall be allowed only to the extent that the
aggregate of such deductions exceeds 2 percent of adjusted gross
income.”
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011