- 3 -
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.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: November 10, 2007