- 41 -
have found as rent items constituting gross income only those
amounts labeled as "Rental Income". We sustain respondent's
determinations of deficiencies for 1982 through 1985 that are
based on the "Additional Income" set forth on Exhibit 201-GK only
to that extent.
Deductions
1987 Schedule E Loss
On Schedule E attached to petitioners' 1987 U.S. Individual
Income Tax Return, petitioners claimed a loss from rental
property (identified as "office 10245 Wilsonville, Wilson") of
$1,936.02. Respondent disallowed that loss on the ground, among
others, that petitioners had not established that the property
was anything other than their personal residence. On brief, in
objection to respondent's proposed finding of fact that
petitioners claimed Walter's office in petitioners' home as a
rental property, petitioners argue that the loss in question
represents management expenses attributable to rental properties,
but not directly attributable to a specific rental property.
Petitioners have failed to carry their burden of proving that
they incurred the expenses in question or that, indeed, they
related to any rental properties owned by one or the other (or
both) of them. Respondent's disallowance is sustained.
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