§164 — Taxes

164(a) provides that State, local, and foreign taxes are deductible by the person on whomthe taxes are imposed. See sec. 1.164-l(a), Income Tax Regs. However, sec. 164(a) addresses only the deductibility oftaxes, not whether taxes should be included in gross receipts. Consequently, sec. 164(a) is inapplicable with respect to the issue ofwhetherpetitioner must include in gross receipts proceeds attributable to the cigarette tax stamps.

Whether or not section 56(b)(1)(A)(ii) has that effect, we do not agree that that reading precludes respondent's claim here; i.e., that a deduction under section 216(a)(1) based on taxes paid by a cooperative housing corporation is a deduction for taxes "described in" section 164(a).

State and Local General Sales Taxes Section 164 provides rules for deducting state and local real property taxes and personal property taxes.

State and Local Tax “Section 164 provides the rules under which taxpayers choosing to use itemized deductions may deduct certain taxes.” Figures v.

164 provides that certain taxes shall be deductible for the tax year in which they are paid or accrued.

Because we find that personal considerations primarily motivated the security system installation, we hold that respondent properly denied the related deduction.

Taxes Respondent disallowedbetitioner's 2009 taxable year Schedule A deduction for taxes of$7,142.3 Section 164 provides the rules under which taxpayers choosing to use itemized deductions may deduct certain taxes.

Accordingly, we hold that 'petitioners are liable.for self-employment tax of $836 on $5,592 of nonemployee compensation, see sec.

Since we hold petitioner had self-employment income, petitioner is also subject to self-employment taxes and is entitled to a deduction for one-half of the tax amount.

Because we hold that the Swansons earned the income, they are liable for the self-employment tax imposed by section 1401 and entitled to the 'related deduction under section 164 (f).

Because he was not liable on the Greenpoint mortgage and because he was not the legal or equitable owner of the Bronx Boulevard house, we hold that petitioner was not entitled to a I deduction for mortgage interest on his 2003 income tax return .

, 1979-1 C.B. at 182, states that the cost of goods sold does not include proceeds attributable to the collection of State sales taxes. However, Rev. Rul. 79-196, supra, is inapplicable to this case because: (1) it addresses the de-ductibility under sec. 164 of State general sales taxes, not cigarette stamp taxes, see sec. 164(b)(5)(B); (2) it addresses installment sale reporting, not inventory reporting; and (3) it was issued before the enactment of sec. 263A. Sec. 471 provides the general rule

(Section 164 does not apply to the employer’s payment of FICA and FUTA taxes.) The withheld Federal 6Federal income and FICA taxes withheld by an employer from an employee’s remuneration are considered to be part of that remuneration and deductible as such by the employer under sec. 162(a). - 16 - income and FICA taxes are reported quarterly on For

and 165. For example, deductions for State and local property taxes incurred with respect to passive activities are subject to limitation under the passive loss rule whether such deductions are claimed above- the-line or as itemized deductions under section 164. [H. Conf. Rept. 99-841 (Vol. 2), at II-139, 1986-3 C.B. (Vol. 4) 139.] In this case, it is the treatment of the Texas rollback taxes that is in dispute. Therefore, if the portfolio income provisions are involved as respondent maintains,

es stipulated that petitionerpaid $1,081 in taxes related to the property but did not specify the nature ofthe taxes paid. See supra note 4. Neither petitioner nor respondent addresses whether the deduction claimed for taxes would be allowable under sec. 164. See sec. 195(c)(1) (flush language). In any event, petitioner claimed the standard deduction on his 2007 tax return. Therefore, given our disposition ofthe disputed issue herein, we need not, and do not, decide whether petitioner is entitle

Background Section 164 provides a deduction for real property taxes and other specified taxes paid or accrued by the taxpayer during the taxable year.

According to the conference report, there previously was uncertainty as to whether certain taxes incurred in a trade or business or an income-producing activity could be deducted under section 164 or had to be capitalized under former section 189 or section 263.

According to the conference report, there previously was uncertainty as to whether certain taxes incurred in a trade or business or an income-producing activity could be deducted under section 164 or had to be capitalized under former section 189 or section 263.

porations may also claim a credit for the taxes deemed paid under sections 902 and 960 where the corporation owns at least 10 percent of a foreign corporation. If the election under section 901 is not made, a taxpayer may deduct the taxes paid under section 164. The overall limitation language of section 904 was added in 1921 as part of section 238(a) of the Revenue Act of 1921, ch. 136, 42 Stat. 227, 258, to prevent foreign tax credits from eliminating U.S. tax on domestic source income. Theo H

Section 164 allows itemized deductions for state and local personal property taxes and for state and local real property taxes paid during the taxable year. For this purpose, the term “personal property tax” means an ad valorem tax imposed on an annual basis in respect of personal property, and the term “real property tax” means tax imposed on inte

Although federal excise taxes are generally not deductible under section 164 as taxes paid, those that are “paid or accrued by the taxpayer in connection with an acquisition or disposition of property shall be treated as part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition,” and, therefore, fuel excise taxes may be included in a taxp

Thus petitioner is entitled to a deduction under section 164 for that amount.

Respondent agrees that petitioners are entitled to deduct, under section 164, $1,017 of the claimed Schedule A deduction for real estate taxes.

Respondent also allowed deductions on Schedule A for State and local property taxes for all other properties, pursuant to section 164, and for interest paid on the Florida house mortgage, pursuant to section 163(h).

OPINION Deduction for Taxes Paid Under Section 164 Section 164 allows a deduction for certain taxes, including State and local property taxes.

Neither section 164 nor regulations promulgated thereunder explicitly define the term “foreign income taxes”.

Neither section 164 nor regulations promulgated thereunder explicitly define the term “foreign income taxes”.

Property Taxes Section 164 allows a deduction for certain taxes, including State and local real property taxes.

164; Mitchell v. Commissioner, T.C. Memo. 1983-155. As to the $9,748 balance of itemized deductions ($11,305 - $1,557), petitioners neither presented documentary evidence nor proffered specific and convincing testimony substantiating the deductions. Petitioners have failed to meet their burden of proof, and we sustain respondent's determinatio

ax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2116. Petitioner testified that the taxes, for which he claimed a deduction in the amount of $998, were State sales taxes and taxes imposed on utilities purchases. These taxes are not deductible under section 164. Respondent is sustained on this issue. Other Miscellaneous Deductions Petitioner claimed a deduction in the amount of $1,010 paid in connection with his sister-in-law's burial and service held at sea. Petitioner seems to argue that becau

ation (as defined in section 1371(b))” was struck from section 183(a) and “an S corporation” was inserted in its place. Subchapter S Revision Act of 1982, Pub. L. No. 97-354, § 5(a)(23), 96 Stat. 1669, 1694. 22 [*22] interest (sec. 163), and taxes (sec. 164). Viewed in the context of its position in part VI, section 183 is simply a statute that allows certain deductions attributable to “activities not engaged in for profit” in computing taxable income under section 63(a). Section 183(c) defines

The notice was 10 Though there may have been reductions in section 164 state and local tax deductions and other effects, this 78% return was otherwise tax free because it represented a reduction in tax rather than a taxable gain.

Section 164 allows a deduction for certain taxes, including state and local real property taxes, regardless of whether they were paid or incurred in a trade or business. Tschetter v. Commissioner, T.C. Memo. 2003-326, 86 T.C.M. (CCH) 639, 645. Generally, taxes are deductible 24 Exhibit 514-P attached a confirmation receipt for real property taxes o

entered into a payment plan for an outstanding Hackensack University Medical Center medical bill, which showed that petitioners had made a $195 payment toward the bill. 5 The Internal Revenue Code provides a deduction for taxes paid on real property, but not an exception to the 10% penalty on early withdrawal for taxes paid on real property. See §§ 164, 72(t).

utory right complements, and does not supplant, the common-law right. See Miller v. Collectors Universe, Inc., 72 Cal. Rptr. 3d 194, 204-05 (Ct. App. 2008); 6A Romualdo P. Eclavea et al., California Jurisprudence 3d, Assault and Other Willful Torts, sec. 164 (West 2021). Both the common law-right and the statutory right are still around today. See Eclavea et al., supra, secs. 162-65. 34 The original code section was 990. See Cal. Civ. Code sec. 990; Comedy III Prods., Inc. v. Gary Saderup, Inc.,

Import of Our Decision in NCSBA Before turning to SJW’s arguments, we pause to consider the significance of our recent decision in NCSBA as it relates to these cases.7 There, NCSBA--also a medical marijuana dispensary--sought to save from disallowance the deductions it claimed for taxes (under section 164) and depreciation (under section 167).

Import of Our Decision in NCSBA Before turning to SJW’s arguments, we pause to consider the significance of our recent decision in NCSBA as it relates to these cases.7 There, NCSBA--also a medical marijuana dispensary--sought to save from disallowance the deductions it claimed for taxes (under section 164) and depreciation (under section 167).

164 allows a deduction for those payments, those taxes paid are not startup expenditures. See sec. 195(c)(1)(B). If necessary, the parties can address that in their Rule 155 computation. - 18 - [*18] we sustain respondent's adjustments disallowing petitioners' Schedule C (farming) and F losses.6 II. Real Estate Activities Petitioners have fai

Import of Our Decision in NCSBA Before turning to SJW’s arguments, we pause to consider the significance of our recent decision in NCSBA as it relates to these cases.7 There, NCSBA--also a medical marijuana dispensary--sought to save from disallowance the deductions it claimed for taxes (under section 164) and depreciation (under section 167).

covered into" VIBIR by the IRS--were payments ofVirgin Islands tax eli- gible for credit under section 901. In their computations for entry ofdecision they contended that both categories ofpayments constituted State or local taxes deduct- ible under section 164. In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities und

covered into" VIBIR by the IRS--were payments ofVirgin Islands tax eli- gible for credit under section 901. In their computations for entry ofdecision they contended that both categories ofpayments constituted State or local taxes deduct- ible under section 164. In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities und

covered into" VIBIR by the IRS--were payments ofVirgin Islands tax eli- gible for credit under section 901. In their computations for entry ofdecision they contended that both categories ofpayments constituted State or local taxes deduct- ible under section 164. In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities und

Real Property Taxes Section 164 allows taxpayers to deduct certain taxes paid within a taxable year.

timony that the satellite television had different receivers to show that the bills were separate and that this was not a personal expense. See sec. 262(a) (disallowing personal expenses). Additionally, 27Property taxes are generally deductible, see sec. 164, but petitioners provided no evidence as to whether, for example, Stitch It owned the property or they owned the property that incurred the liability or the nature ofthe property. 28Petitioners' activities that were not operated with a profi

timony that the satellite television had different receivers to show that the bills were separate and that this was not a personal expense. See sec. 262(a) (disallowing personal expenses). Additionally, 27Property taxes are generally deductible, see sec. 164, but petitioners provided no evidence as to whether, for example, Stitch It owned the property or they owned the property that incurred the liability or the nature ofthe property. 28Petitioners' activities that were not operated with a profi

for personal labor that was received as repayment of "On the basis ofpetitioner's business income of$2,320 in 2004, respondent determined that petitioner is liable for self-employmenttax of$328 for 2004, taking into account the deduction allowed by sec. 164. See sec. 1401. Petitioner did not challenge this determination in his petition. - 29 - [*29] a debt". As discussed supra, petitioner's argument is the type offrivolous argument that this Court and the U.S. Court ofAppeals for the Tenth Circ

Bridge, tax paid to California by Virgin Islands residents is deductible under section 164 but not creditable under section 901).

led to deduct it. The parties stipulated that petitionerpaid $11,784 in back property taxes (continued...) - 27 - [*27] these costs under section 263A. Petitioner argues that these costs are immediately deductible under section 162 or alternatively section 164. 1. Taxes Section 164(a)(1) allows a deduction for State and local real property taxes paid or accrued during the year. Sections 162 and 164 are subject, ifapplicable, to the section 263A capitalization rules. See sec. 161; see also Nat'l

0,672 $2,401.20 $2,668.00 $356.63 2003 10,871 2,445.98 2,717.75 280.51 2004 11,488 2,584.80 2,872.00 329.24 2005 12,957 (cid:16)042 2,915.33 2,461.83 519.75 2006 14,132 3,179.70 1,837.16 668.81 2007 24,122 5,427.45 1,668.54 1,097.84 Respondent conceded at trial that petitioner was entitled to section 163 deductions for mortgage interest as well as section 164 deductions for real estate taxes paid for the years at issue.

Whether Petitioner Is Entifled to a Deduction of$14,419 for Disputed Schedule E Real Property Tax Expenses for 2008 Section 164 allows a deduction for certain taxes, including State and local real property taxes, regardless ofwhether they were paid or incurred in a trade or business.

Moreover, they are entitled to an indome-tax deduction under section 164 (f) equal' to one-half of the additional self-employment tax.

- 24 - (1) the real estate taxes allowable as a deduction to the corporation under section 164 which are paid or incurred by the corporation on the houses or apartment building and on the land on which such houses (or building) are situated, or (2) the interest allowable as a deduction to the corporation under section 163 which is paid or incurred by the corporation on its indebtedness contracted-- (A) in the acquisition, constru

Petitioner also claims a section 164 deduction for property taxes paid on the property in 1991.

for the staxable year, plus ( i) the amoùnt of the taxp'ayer' s net earn- ings f om selfiemployment for the taxable year (withi the meaning of section 1402 (a) ) , but such net ea nings shall be determined with regard to the de uction allowed to the taxpayer by section 164 (f) Section 32 (c) (2) B) provides that for purposes, of section 32 (c) (2) (A) the t erm "earned income" does not include amounts received as a per sion or-an annuity.

Respondent appears to reason that if an individual taxpayer who sells credits itemizes deductions (ignoring phase-outs), that taxpayer's section 164 Federal income tax deduction is greater than it: would have been had that taxpayer retained and used the credits.

urn. A. Whether Petitioners Are Entitled to.the Deductions as a Result of the Withholdings Petitioners claim that the amounts withheld from Mr. May's paycheck for State income taxes entitle them to Federal income tax deductions for those taxes under section 164. We disagree. Like the withholdings for Federal taxes, the withholdings from Mr. May's paycheck for State income taxes were not remitted to the proper authorities. Those withholdings remained in Maranatha's bank account under the function

urn. A. Whether Petitioners Are Entitled to.the Deductions as a Result of the Withholdings Petitioners claim that the amounts withheld from Mr. May's paycheck for State income taxes entitle them to Federal income tax deductions for those taxes under section 164. We disagree. Like the withholdings for Federal taxes, the withholdings from Mr. May's paycheck for State income taxes were not remitted to the proper authorities. Those withholdings remained in Maranatha's bank account under the function

Respondent appears to reason that if an individual taxpayer who sells credits itemizes deductions (ignoring phase-outs), that taxpayer’s section 164 Federal income tax deduction is greater than it would have been had that taxpayer retained and used the credits.

or accrued to a cooperative housing corporation within the taxable year, but only to the extent that such amounts represent the tenant-stockholder’s proportionate share of— (1) the real estate taxes allowable as a deduction to the corporation under section 164 which are paid or incurred by the corporation on the houses or apartment building and on the land on which such houses (or building) are situated, or (2) the interest allowable as a deduction to the corporation under section 163 which is

Under section 164(f ) petitioners are entitled to a deduction for income tax purposes . of one-half of their self-employment, taxes .-._ , IV. Additional Tax for Early Distribution From Qualified Retirement Plan Section 72(t)(1) imposes a 10-percent additional tax o n early distributions from qualified retirement plans unless the 15 distribution meets o

Respondent asserts, however, that the transaction privilege tax in issue does not qualify as a general sales tax under section 164 because contractor's sales are not sales at retail in the State of Arizona .5 We agree with respondent .

Under section 164(f ) petitioners are entitled to a deduction for income tax purposes . of one-half of their self-employment, taxes .-._ , IV. Additional Tax for Early Distribution From Qualified Retirement Plan Section 72(t)(1) imposes a 10-percent additional tax o n early distributions from qualified retirement plans unless the 15 distribution meets o

Section 164 in effect for taxable year 2001 did not permit th e 12 Petitioners' substantiated medical expenses for 2003 are less than the 7 .5-percent floor imposed by sec . 213(a) . Accordingly, they are not entitled to any medical expense deduction for 2003 . 20 - deduction of State and local general sales taxes on personal purchases ;" rather t

Section 164 allows a deduction for certain taxes, including State and local real property taxes, paid or accrued during the taxable year . Petitioner provided sufficient evidence that she paid $3,056 in real estate taxes for 2002, but provided no evidence with respect to the other years at issue . Accordingly, petitioner is entitled to the deductio

164, 901.4 Section 164(a)(3) provides that a deduction is allowed for foreign income taxes.

In lieu of the section 164 deduction, section 901(a) and (b)(1) permits a taxpayer to elect a credit for foreign income tax which meets the requirements set forth in the statute and the regulations promulgated thereunder.

Under section 164, real property taxes paid by a taxpayer may be deductible by the person upon whom the taxes are imposed. Sec. 1.164-1(a), Income Tax Regs.; see Magruder v. Supplee, 316 U.S. 394, 396 (1942). The equitable or beneficial owner of real property who pays taxes assessed against the property to protect his or her interest therein may deduct t

of the contract for deed as alimony. 10This general rule does not apply to those expenses that are deductible regardless of any connection with a trade or business, such as mortgage interest on the residence under sec. 163, real estate taxes under sec. 164, or casualty losses under sec. 165. Sec. 280A(b). - 11 - of the number of days the unit is rented at fair rental value, no deduction is allowed. Sec. 280A(a), (d)(1). Nor may taxpayers deduct expenses for the portion of a residence not “exclu

Under section 164, a taxpayer may deduct State and local real property and income taxes paid or accrued during the taxable year. A real property tax is one that is imposed upon real property to benefit the general public welfare. Sec. 1.164-3(b), Income Tax Regs. A State or local tax is one that is imposed by a State, by a possession of the United States

fer of the contract for deed as alimony. This general rule does not apply to those expenses that are deductible regardless of any connection with a trade or business, such as mortgage interest on the residence under sec. 163, real estate taxes under sec. 164, or casualty losses under sec. 165. Sec. 280A(b). Petitioners vaguely assert that she stayed on a “single occasion.” Nor have petitioners carried their burden to prove that they rented the unit for at least 15 days in 1997. See sec. 280A(g);

The application of section 164 was modified during 1960 by the enactment of section 461(d), 7 Petitioner’s original reporting position for 1989 was to claim a $932,979 deduction for California franchise tax and no deduction for its short taxable year ended Dec.

ductible) paid or accrued to a cooperative housing corporation within the taxable year, to the extent that such amounts represent the tenant-stockholder’s proportionate share of the real estate taxes allowable as a deduction to the corporation under section 164. Sec. 216(a)(1); sec. 1.216- 1(a)(1), Income Tax Regs. Section 164 allows a deduction for real property taxes paid or accrued within the taxable year. Sec. 164(a)(1); sec. 1.164-1(a)(1), Income Tax Regs. Section 55 imposes an alternative

The application of section 164 was modified during 1960 by the enactment of section 461(d), 7 Petitioner’s original reporting position for 1989 was to claim a $932,979 deduction for California franchise tax and no deduction for its short taxable year ended Dec.

The application of section 164 was modified during 1960 by the enactment of section 461(d), which proscribes the accrual of State tax attributable to post-1960 State legislation that would accelerate the accrual of such tax.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 -' from unlawful activity." Petitioners rely exclusively on Jay Hoyt's Federal.conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

Namely, Oregon Revised Statutes (ORS): (1) Section 164.085, theft by deception; (2) section 164.170, laundering a monetary instrument; and (3) section 164.172, engaging in a financial transaction in property derived - 56 - from unlawful activity.13 Petitioners rely exclusively on Jay Hoyt’s Federal conviction in Oregon to establish the elements of a theft under State law.

or incurred.3 3We note that petitioner claimed a $771 deduction for taxes on the Schedule F attached to his 1995 return, and a $67 deduction for mortgage interest on his 1996 Schedule F. Amounts for which a deduction is allowed under sec. 163(a) and sec. 164 are not start-up expenditures. Sec. 195(c)(1). Similarly, sec. 263A does not prevent petitioner from taking a current deduction for property taxes or mortgage interest. Sec. 263A(c)(5). Respondent did not question whether the deductions clai

t dispute that the additional tax applied to the distributions or the amount of the additional tax. Petitioners contend, however, that they are entitled to a deduction on their 1998 Federal income tax return in the amount of the additional tax under section 164. The tax for which the deduction here is claimed arises under section 72(t). Section 72(t) provides that if a taxpayer receives a distribution from a qualified retirement plan “the taxpayer’s tax under this chapter * * * shall be increase

Section 164 allows a deduction for certain taxes, including real property taxes, paid or accrued during the taxable year. - 51 - Sec. 164(a)(1). In the case of a mortgage loan for which the taxpayer is jointly liable with another person, a deduction for mortgage interest and property taxes is allowable to the persons or person who pays such intere

Property Taxes Section 164 allows a deduction for certain taxes, including State and local real property taxes.

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

Property Taxes Section 164 allows a deduction for certain taxes, including State and local real property taxes.

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

Property Taxes Section 164 allows a deduction for certain taxes, including State and local real property taxes.

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

haracterized as compensation for services earned by the individual Ps, and as U.S. source income to the individual Ps, except as to the two Ps who resided in Israel. Held, further, Ps are not entitled to seek a deduction for foreign taxes paid under sec. 164, I.R.C., in lieu of the disallowed foreign tax credits. Held, further, the individual Ps are liable for accuracy-related penalties pursuant to sec. 6662(a), I.R.C., but the corporate P is not. Robert J. Percy and Bruce Judelson, for petition

ract generally is voidable if one party's assent to the agreement is induced by a fraudulent or material misrepresentation by the other party to the contract. See Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 335 (1997); 1 Restatement, supra sec. 164(1). A party's nondisclosure of a fact known to him is treated as an assertion that the fact does not exist where he knows that the disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party

ract generally is voidable if one party's assent to the agreement is induced by a fraudulent or material misrepresentation by the other party to the contract. See Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 335 (1997); 1 Restatement, supra sec. 164(1). A party's nondisclosure of a fact known to him is treated as an assertion that the fact does not exist where he knows that the disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party

ract generally is voidable if one party's assent to the agreement is induced by a fraudulent or material misrepresentation by the other party to the contract. See Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 335 (1997); 1 Restatement, supra sec. 164(1). A party's nondisclosure of a fact known to him is treated as an assertion that the fact does not exist where he knows that the disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party

Under section 164, a deduction is allowed for any State, local or foreign real property tax. See sec. 164(a)(1). Receipts produced by petitioners, however, in an attempt to substantiate their deduction, clearly state that the taxes were paid on March 17, 1997, not the year at issue. Respondent properly disallowed this deduction. III. Mortgage Interest Pe

ly if the activity were engaged in for profit, but such deductions may be taken only to the extent that any gross income generated from the activity exceeds deductions that are not dependent upon a profit objective (e.g., State and local taxes under section 164). Although a reasonable expectation of profit is not required, the facts and circumstances must indicate that the taxpayer entered into the activity or continued the activity with the actual and honest objective of making a profit. See Ke

ract generally is voidable if one party's assent to the agreement is induced by a fraudulent or material misrepresentation by the other party to the contract. See Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 335 (1997); 1 Restatement, supra sec. 164(1). A party's nondisclosure of a fact known to him is treated as an assertion that the fact does not exist where he knows that the disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party

ract generally is voidable if one party's assent to the agreement is induced by a fraudulent or material misrepresentation by the other party to the contract. See Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320, 335 (1997); 1 Restatement, supra sec. 164(1). A party's nondisclosure of a fact known to him is treated as an assertion that the fact does not exist where he knows that the disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party

y if the activity were engaged in for profit, but such deductions may be taken only to the extent that any gross income generated from the activity exceeds deductions which are not dependent upon a profit objective (e.g., State and local taxes under section 164). Although a reasonable expectation of profit is not required, the facts and circumstances must indicate that the taxpayer entered into the activity, or continued the activity, with the actual and honest objective of making a profit. Kean

y if the activity were engaged in for profit, but such deductions may be taken only to the extent that any gross income generated from the activity exceeds deductions which are not dependent upon a profit objective (e.g., State and local taxes under section 164). Although a reasonable expectation of profit is not required, the facts and circumstances must indicate that the taxpayer entered into the activity, or continued the activity, with the actual and honest objective of making a profit. Kean

A(b), deductions which are otherwise allowable without regard to any connection with a trade or business include the deduction for: (1) Interest under sec. 163, subject to the sec. 163(h)(1) personal interest restriction, (2) real estate taxes under sec. 164, and (3) casualty losses under sec. 165. - 24 - Commissioner, T.C. Memo. 1994-60, affd. without published opinion 78 F.3d 594 (9th Cir. 1996). As a general rule, section 280F(d)(4) treats any computer or peripheral equipment as listed proper

164; see Fife v. Commissioner, 73 T.C. 621 (1980). Petitioner has offered no evidence to substantiate the charitable contribution deduction claimed on Schedule A of his 1991 tax return. Since petitioner has not substantiated this claimed deduction, we sustain respondent's disallowance of the claimed deduction. - 24 - Petitioner deducted $2,85

Even so, the real estate taxes petitioner paid on these properties could be deductible under section 164 and allowable under section 183(b)(2).

However, we also held that based upon the language quoted above this Court did have jurisdiction to redetermine the amount of the taxpayer's deduction for windfall profit tax under section 164 because “The deduction allowed by section 164 is a part of the calculation of ‘the tax imposed by subtitle A.’” Logan v.