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reduced, thereby in all likelihood eliminating the claimed
carryover loss.
The claimed $479,000 investment interest carryover from 1984
relates to interest paid on a loan petitioners allegedly made to
LCOR, a corporation owned and controlled by petitioners and by
petitioners' relatives and/or friends. The evidence in this case
establishes neither the existence of a loan to LCOR nor the
existence or character of payments made by petitioners to LCOR.
Daniel and Eva are not entitled to any of the carryovers in
dispute. Respondent's disallowance of the claimed 1984 net
operating loss, investment interest, and investment credit
carryovers is sustained.
Gain on Sale of Residence
In 1986, petitioners sold a residence located in McPherson,
Kansas. At trial, Daniel acknowledged that he, Eva, and other
family members had often made personal use of this residence. On
petitioners' 1985 and 1986 joint Federal income tax returns, no
rental income was reported by petitioners relating to the rental
of this residence.
On their 1986 joint Federal income tax return, petitioners
claimed a $24,582 ordinary loss with regard to the sale of this
residence.
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