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2003 lists the employee’s name as “Michael Byard” and the
occupation in which the expenses were incurred as “Comp Progra”.
The $24,000 expense deduction at issue was recorded on the 2003
Form 2106 on line 2 entitled “Parking fees, tolls, and
transportation, including train, bus, etc., that did not involve
overnight travel or commuting to and from work”.
On Schedule C, Profit or Loss From Business, of their Form
1040, U.S. Individual Income Tax Return, petitioners listed both
their names under business proprietor and stated their principal
business as a “Janitorial Cleaning Service”. Petitioners
reported $9,864 in gross receipts on their Schedule C and $20,344
in total expenses, resulting in a net loss of $10,480. Line 13,
entitled “Depreciation and section 179 expense deduction”, of
their Schedule C has no entry. On line 9, entitled “Car and
truck expenses”, of that same form, petitioners claimed a
deduction of $5,054.
Discussion
The issue in this case is whether petitioners made a valid
section 179 election to deduct $24,000 of the cost of a sport-
utility vehicle (SUV) purchased in 2003 and used in their part-
time janitorial cleaning business. Petitioners argue that the
$24,000 expense deduction claimed on Form 2106 was placed on the
wrong form, was related to the purchase of the SUV allegedly used
100 percent in the cleaning business, and that their intent was
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Last modified: November 10, 2007