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After concessions,2 the issues for decision are: (1)
Whether petitioners are entitled to Schedule C depreciation
expense in the amount of $3,200, and (2) whether petitioners are
entitled to Schedule C rental expense in the amount of $2,410.
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference. Petitioners resided in Cerritos,
California, at the time of the filing of this petition. Because
the activities herein were conducted by Rahim A. Munshi, all
further references to "petitioner" will be to Mr. Munshi. During
the year at issue, petitioner was a full-time engineer in the
aerospace department of Northrop Corporation.
For some time, because of defense cutbacks and company
layoffs, petitioner had become concerned about job security. He
decided to go into real estate as another source of income and
obtained a real estate salesperson license on July 2, 1990.
After obtaining his license, petitioner researched real estate
offices to find a place to hang his real estate license.
Petitioner became associated as a real estate salesperson
with Real Estate Plus, Inc. (REP), which was operated by broker
Wray Beihagi. Pursuant to the "Real Estate Special Commission
Choices" agreement signed by petitioner on October 10, 1990,
2 Respondent conceded $840 of the Schedule C rental
expense. Petitioners conceded that they received interest income
of $265.
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