Frank H. and Marla C. Black - Page 7

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               Mr. Black wrote a letter as manager of Robert Thomas                   
          Securities to Lincoln National Insurance canceling a group                  
          medical insurance policy and stating that his business was                  
          renewing a group medical insurance policy with Continental                  
               Special Agent O’Dell stated in his report that Mr. Black               
          paid a total of $4,371 in health insurance premiums during the              
          period January through July 1991, before terminating the policy.            
               During 1992, Mr. Black paid the C.P.A. firm of Martinson,              
          Newton & Co., C.P.A.s, a fee of $225 for preparing petitioners’             
          1991 joint return, and for preparing amended joint Federal and              
          State income tax returns for 1990.                                          
               During 1992, Mr. Black paid Bob West a fee of $250 to form             
          Mr. Black’s North Carolina C-Corporation, Frank Black, Inc.                 
               The notice of deficiency treated both the $225 income tax              
          return preparation fee and the $250 incorporation fee as                    
          nondeductible expenditures for purposes of respondent’s net worth           
               During 1991 and 1992, petitioners made credit card payments            
          totaling $22,796.48 and $20,320.19, respectively, all of which              
          payments were treated as nondeductible in the notice of                     
               Petitioners claimed Schedule C, Profit or Loss From                    
          Business, deductions on their 1991 joint return for payments of             

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Last modified: March 27, 2008