Barry L. Morris - Page 7

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               Because petitioner has failed to file a brief, the nature of           
          his arguments is not entirely clear.  In any event, no evidence             
          has been admitted that would tend to support any of the claimed             
          business expense deductions that were not conceded by respondent.           
          To make matters worse, petitioner’s testimony was plagued by                
          memory lapses and confessions of error with respect to some of              
          his claimed deductions.  The Court therefore concludes that                 
          petitioner has failed to demonstrate entitlement to deductions              
          for any business expenses in excess of those conceded by                    
          III.  Deduction for State Tax Payments                                      
               State income taxes paid or accrued during the taxable year             
          are generally deductible.  See sec. 164(a)(3).  At trial,                   
          petitioner asserted tersely that he made five payments of $310 to           
          the California Franchise Tax Board in 2000.  Aside from that                
          assertion, there is no evidence of record to demonstrate that               
          petitioner actually made those payments on behalf of his                    
          business.  Because petitioner has failed to properly substantiate           
          the claimed State tax payments, he has not demonstrated                     
          entitlement to a deduction for State tax payments with respect to           
          his 2000 taxable year.                                                      
          IV. Deduction for Alimony or Separate Maintenance Payments                  
               Payments incident to a divorce that are characterized as               
          alimony or separate maintenance are deductible by the payor.                

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