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able to provide verification or substantiation for any deduction
claimed with respect to such expenses. In the case before us, no
documentation was introduced to substantiate any of the disallowed
rental expenses. Indeed, Dr. Novick and Mr. Fenton admitted that
they did not have any documents to substantiate the disallowed
rental deductions.
The only evidence in the record offered to support the
disallowed rental expenses relating to the Texas rental was Dr.
Novick's testimony with regard to the automobile and travel
expenses. Dr. Novick testified that in 1989, petitioners and their
three children (ages 1, 7, and 14) took a trip to inspect the Texas
property and to show petitioners' children the property lines of
the property they would one day inherit.
The only evidence in the record to support the disallowed
rental expenses relating to the Tahoe property was Dr. Novick's
testimony that because the Tahoe property was a cedar house, it had
to be pressure-sealed with sealant oil each year. No testimony or
documentation was offered as to the cost for this treatment.
The evidence offered by petitioners with respect to
establishing their entitlement to the deduction for rental activity
losses was woefully short of that required. Petitioners neither
produced enough evidence to rebut respondent's deficiency
determination nor produced enough evidence to satisfy their burden
of persuasion. Consequently, petitioners are not entitled to any
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