Ali and Arlene Mohammadpour - Page 5

                                        - 4 -                                         
          been reported as a loss from business.  Instead, respondent                 
          allowed a deduction of $83,451 for the claimed loss from gambling           
          as a Schedule A itemized deduction.                                         
               Reclassification of Mr. Mohammadpour’s gambling activity               
          resulted in the disallowance of petitioners’ claimed child tax              
          credit and in a reduction in the amount of otherwise allowable              
          itemized deductions.                                                        
                As a general rule, the Commissioner’s determinations in the           
          notice of deficiency are presumed correct, and the burden of                
          proving an error is on the taxpayer.  Rule 142(a); Welch v.                 
          Helvering, 290 U.S. 111, 115 (1933).  Petitioners have neither              
          claimed nor shown that they satisfied the requirements of section           
          7491(a) to shift the burden of proof to respondent.  Hence,                 
          petitioners bear the burden of proving that respondent’s                    
          deficiency determinations are incorrect.                                    
               In general, all ordinary and necessary expenses paid or                
          incurred in carrying on a trade or business during the taxable              
          year are deductible.  Sec. 162(a).  A taxpayer may have more than           
          one trade or business.  Curphey v. Commissioner, 73 T.C. 766                
          (1980); Calvao v. Commissioner, T.C. Memo. 2007-57; Barrish v.              
          Commissioner, T.C. Memo. 1984-602.                                          

Page:  Previous  1  2  3  4  5  6  7  8  9  Next 

Last modified: November 10, 2007