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petitioner was to receive a 100-percent commission from the
listing and selling of real properties; however, petitioner was
required to pay REP $70 per month for sharing a desk and $100 at
the close of any escrow. In addition, petitioner was required to
pay for all Board of Realtors and Multiple Listing Service (MLS)
fees, listing input fees, real estate forms, advertising,
stationery, real estate signs, and stamps. Further, petitioner
was to keep track of, and was charged for, all telephone calls,
facsimiles, copy paper, use of REP's conference room, and
computer time (if charges were incurred). Petitioner considered
these expenses an additional rental expense.
Petitioner received monthly bills from REP, which charged
fees for the support services that were used by petitioner.
Petitioner did not pay these bills promptly because he was not
selling properties. Petitioner usually paid these bills 2 to 3
months late.3
In 1988 or 1989, petitioner purchased a MacIntosh 2X
computer. Petitioner also purchased a color monitor, laser
printer, copy machine, and facsimile machine. In addition,
petitioner purchased extensive software which he used, in part,
to access the MLS service. Petitioner allegedly obtained a loan
3 Petitioner was invited to supplement the record with
copies of billing statements, receipts, invoices, or canceled
checks to support his claimed deduction for rental expense within
30 days after trial. No such documents have been submitted.
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Last modified: May 25, 2011