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Petitioner purchased the Adams house in 1996 and still owns
it. Petitioner would drive from California to Arizona weekly to
perform maintenance on the Adams house.
Petitioner hired Desert Wide Properties (Desert Wide) to
manage the Adams property. Desert Wide was not responsible for
cleaning the house or otherwise preparing it for rental. They
simply advertised the property for rental and did not charge
petitioner a fee until the property was rented. The Adams house
was rented from September 1999 through the entire 2000 tax year.
After it was rented, petitioner had no further need to drive to
Arizona.
Petitioner has owned the Persimmon house since 1990. In
1993, he hired Southern California Real Estate Management Co. to
manage the property. During the years at issue, petitioner had a
tenant in the house and did not visit the property.
On his 1999 Schedule E, Supplemental Income and Loss,
petitioner claimed deductions pertaining to the Adams and
Persimmon properties of $28,614.27 and $38,649.53, respectively.
Petitioner lived in the Adams house from January through June
1999. In the notice of deficiency, respondent reclassified from
Schedule E to Schedule A, Itemized Deductions,
$5,860 of the mortgage interest and property taxes attributable
to the Adams property for the period during which petitioner
lived there.
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