Julie A. Toth - Page 2

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               Russell R. Kilkenny, for petitioner.                                   
               Shirley M. Francis, for respondent.                                    


               HAINES, Judge:  Respondent determined deficiencies in                  
          petitioner’s Federal income taxes for 1998 and 2001 (years at               
          issue) of $112,461 and $84,388, as well as additions to tax under           
          section 6651(a)(1) of $19,512 and $13,920, under section                    
          6651(a)(2) to be computed, and under section 6654(a) of $3,806              
          and $2,349, respectively.                                                   
               The issue for decision as framed by the parties is:  whether           
          petitioner may deduct expenses in connection with her horse                 
          boarding and training activities for the years at issue pursuant            
          to section 212 or instead is required by section 195(a) to                  
          capitalize them as startup expenditures.1                                   
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.  Petitioner lived in                 
          Oregon when she filed her petition.                                         
               Petitioner was employed by the pharmaceutical firm Pfizer,             
          Inc. (Pfizer), from 1988 to May 9, 2000.  In March 1997,                    

               1 Unless otherwise indicated, all section references are to            
          the Internal Revenue Code, as amended.  All Rule references are             
          to the Tax Court Rules of Practice and Procedure, unless                    
          otherwise indicated.  Amounts are rounded to the nearest dollar.            





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