Harry E. Thomason and Estate of Hattie D. Thomason, Deceased, Mary T. Crist, Personal Representative - Page 8
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US Tax Court > 1997 > Harry E. Thomason and Estate of Hattie D. Thomason, Deceased, Mary T. Crist, Personal Representative - Page 8
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At trial, respondent acknowledged that, as to Schedule C
expenses, petitioner could substantiate that he "spent $24,000"
in 1991, nevertheless, "[respondent had] no way of knowing to
where those expenses would be assigned", and "that seems to be
the crux of this case." The Court construes this statement to
mean that, while respondent was satisfied that petitioners'
Schedule E correctly reflected the income and expenses for those
properties identified on Schedule E, respondent could not
determine whether any of the expenses claimed on Schedule C
related to any of the rental properties on Schedule E, and,
moreover, respondent was satisfied that petitioners were not
engaged in any trade or business activity and, therefore, were
not entitled to a deduction for any of the expenses claimed on
The only documentary evidence presented by petitioner to
substantiate the Schedule C expenses, and to support a
categorization thereof, was a stack of 143 canceled checks
written by petitioner in 1991, which he contends were paid in
connection with his various activities that year. The submitted
checks total approximately $30,000.6
expenses and depreciation of $58,739, and net rental income of
$56,121. Respondent made no adjustments to either the income or
expenses reported on Schedule E.
This amount excludes approximately $1,500 worth of "voided"
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