After concessions1 by the parties, the issues remaining for our consideration are: (1) Whether petitioners are entitled to deduct losses from charter activities of two boats, which were passed through to petitioners from their wholly owned S corporation, "Island Ventures, Inc."; (2) whether petitioners are entitled to deduct losses attributable to the rental of residential property located in the Lake Tahoe area (the Tahoe property); (3) whether petitioners are entitled to deduct automobile expenses attributable to Mrs. Hilliard's self- employment activity in an amount greater than that allowed by respondent and, if not, whether petitioners are liable for additional self-employment tax; (4) whether petitioners are entitled to deduct mortgage interest in an amount greater than that allowed by respondent; (5) whether petitioners are liable for additions to tax for negligence; and (6) whether petitioners are liable for additions to tax for substantial understatement of their tax liability. The question of whether petitioners are entitled to deduct 1 Petitioners conceded that: (1) Respondent's $11,992 investment tax credit recapture adjustment for 1987 is correct; (2) respondent's adjustments regarding the Tahoe property in items d, e, and i in the Adjustment to Income (Supplemental Schedule) in the notice of deficiency are correct if the Court should find that the Tahoe rental activity was not for profit under sec. 183, I.R.C., and if the activity was for profit, then the loss limitations of sec. 280A(e), I.R.C., would apply; (3) they are not entitled to an interest deduction for $7,153 of points claimed for 1987; (4) $2,625 of interest claimed for 1987 with respect to the Tahoe property is not allowable; (5) $1,385 of the investment interest claimed for 1988 is not allowable; and (6) $460 of personal interest claimed for 1987 is not allowable.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011