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Petitioners also rely on Vebeliunas to avoid the additions to tax
for negligence. We believe that he has an interest in seeing
petitioners prevail.
We find that at no time during the years in issue was Good
Shepherd in the business of buying, fixing-up, and selling
distressed properties. Moreover, we find that at no time during
those years did Good Shepherd carry on any trade or business
within the meaning of section 162(a). Expenditures that
otherwise would have qualified for deduction under section
162(a), and that related to the establishment of a nursing home
or health care facility, were preopening expenses, which for that
reason, are nondeductible. Moreover, any expenditures that Good
Shepherd may have made with regard to the elderly individuals
remaining in residence on the property when it was acquired from
Ona Pranckeviciute were expenditures that constitute part of the
cost of the property. For that reason, such expenditures are
nondeductible. See sec. 263(a).
B. Taxes
Section 164(a) allows a deduction for certain taxes paid or
accrued during the taxable year. For 1986, Good Shepherd claimed
a deduction for taxes of $66. Petitioners have failed to
substantiate that such taxes were paid. For that reason, no
deduction is allowed.
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