Rahim A. and Lisa R. Munshi - Page 3

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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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