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MEMORANDUM FINDINGS OF FACT AND OPINION
POWELL, Special Trial Judge: This case was assigned
pursuant to the provisions of section 7443A(b)(3) and Rules 180,
181, and 182.1
Respondent determined deficiencies in petitioners' Federal
income taxes in the following amounts:
Year Deficiency
1987 $1,694
1988 8,337
1989 9,930
1990 9,511
1991 2,089
The issue is whether deductions related to the expenses of
renting a beach condominium owned by petitioners are limited by
the passive activity loss limitations of section 469.
FINDINGS OF FACT
During the years 1987 through 1991, and at the time of
filing the petition, petitioners resided in Silver Spring,
Maryland. Petitioner B. Theodore Chapin (Mr. Chapin) worked full
time as vice president of American Digital Systems Corp. until
December of 1990, at which time he organized and began working
full time for his own corporation, Applied Software, Inc.
Petitioner Wendy Chapin (Mrs. Chapin) is a housewife/artist who
1 Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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