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After concessions,2 the issues for decision are: (1)
Whether petitioners are entitled to deduct claimed Schedule E
expenses as follows:
Property A Property B
Advertising $350 $350
Auto and travel 850 4,500
Cleaning
and maintenance 2,000 3,000
Insurance 1,200 1,800
Mortgage interest 7,484 13,462
Repairs 6,500 12,000
Supplies 2,000 900
Taxes 1,404 1,404
Utilities 3,000 3,000
Total 24,788 40,416
(2) whether petitioners are entitled to claim Schedule A itemized
deductions as follows:
Medical and dental expenses $25,000
Home mortgage interest 13,642
Charitable contributions by cash
or check 18,000
Charitable contributions other
than by cash or check 500
Unreimbursed employee expenses 13,500
Total 70,642
(3) whether petitioners failed to report rental income; (4)
whether petitioners are entitled to claim five dependency
exemption deductions; and (5) whether petitioners are liable for
the accuracy-related penalty under section 6662(a).
2 Petitioners concede that they are not entitled to claim:
(1) A $1,404 Schedule A deduction for real estate taxes; (2) a
$150 Schedule A deduction for personal property taxes; (3) any
expenses with respect to “Property C”, as listed on Schedule E of
their 2002 return; (4) passive activity losses of $81,120.
Petitioners are also not contesting the increase in their
alternative minimum tax.
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Last modified: March 27, 2008