Barbara A. Trimble-Gee - Page 4




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          rebate.  Petitioner used the vehicles to bring equipment to the             
          houses and businesses she cleaned, as well as for personal use.2            
               On her 2001 and 2002 Federal income tax returns, petitioner            
          reported the income and expenses of the cleaning business on                
          Schedules C, Profit or Loss From Business.  On her 2001 Schedule            
          C, petitioner reported gross income of $5,745 and expenses of               
          $28,026.  On her 2002 Schedule C, petitioner reported gross                 
          income of $2,377 and expenses of $28,045.                                   
               In January 2006, respondent issued petitioner a notice of              
          deficiency.  For the taxable year 2001, the notice disallowed               
          claimed deductions for $16,815 of depreciation and section 179              
          expense; $4,031 of car and truck expense; and $323 of interest              
          expense.  For the taxable year 2002, the notice disallowed                  
          claimed deductions for $2,977 of depreciation and section 179               
          expense; $10,390 of car and truck expense; $1,302 of meals and              
          entertainment expense; $329 of travel expense; $898 of wage                 
          expense; and $5,202 of “remaining expenses”, which consist of               
          items such as rent, supplies, and utilities expenses.  Respondent           
          also determined a penalty pursuant to section 6662(a) for each              
          year.                                                                       





               2 Petitioner also owned a Volvo station wagon, but she                 
          testified that it was not used in connection with the cleaning              
          business.                                                                   





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