- 5 -
the next in June.4 The driving time from Silver Spring to Ocean
City is approximately 2-1/2 hours.
Petitioners filed joint Federal income tax returns claiming
a business loss on Schedule C from the rental of the condominium
for each of the taxable years at issue. The claimed losses,
after agreed-upon adjustments, were in the following amounts:
Year Loss
1987 $25,341
1988 26,861
1989 23,953
1990 22,493
1991 21,056
In the notice of deficiency, respondent determined that the
rental of the condominium was a passive activity, and, therefore,
petitioners' claimed losses for each year were suspended pursuant
to section 469.
OPINION
Section 162 allows deductions for all the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. Section 212 allows deductions
for all the ordinary and necessary expenses paid or incurred
during the taxable year for the production of income or the
management or maintenance of property held for the production of
4 The receipts showed that petitioners were in Ocean City,
or the vicinity, between five and eight times per year.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011