Joseph J. James - Page 4

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            names of herself and petitioner.  She wrote checks for expenses,                           
            including some checks to "cash".                                                           
                  During the year in issue, petitioner lived at the West                               
            Hortter property until October 1986, when he moved to Texas.  The                          
            property was then converted to rental property.  Also in the fall                          
            of 1986, petitioner's mother and sister moved to his property at                           
            10 Church Road, where they continue to reside and to pay rent.                             
            They continued to manage petitioner's properties at Kingsessing                            
            and his other properties as well.                                                          
                  On his Federal income tax return, petitioner reported all of                         
            the rental income and claimed all of the expenses associated with                          
            the Kingsessing properties.  Neither Ms. Moore nor Ms. Pitt filed                          
            a Federal income tax return for 1986.                                                      
                  In the notice of deficiency, respondent allowed all the                              
            amounts claimed for the property on North Walnut Street.  She                              
            disallowed 50 percent of the expenses claimed on the Kingsessing                           
            Avenue properties, on the theory that petitioner had only a 50-                            
            percent interest.  Some other expenses for those and the                                   
            remaining properties were disallowed for lack of substantiation.                           
            Respondent made concessions in the stipulation and on brief, with                          
            regard to items substantiated by petitioner close to or at time                            
            of trial.                                                                                  
                  The chart below reflects total substantiated expenses:                               
                  Description       4512          4514      400 West    Week 17     10 Church          
                     Kingsessing   Kingsessing   Hortter     Unit 316      Road                       
                  Auto Expense       --           --           --         --           --              

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