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The rent expenses claimed by petitioner with respect to Mr.
Dinunzio's Florida condominium--$9,000 in 1978 and $4,022.68 in
1980--were not shown to be petitioner's ordinary and necessary
business expenses. Moreover, he has not substantiated that he
paid more than $3,360.74 for 1980.
Additionally, for the year 1980 petitioner deducted as rent
expense $6,451.86 paid for a New York city condominium for his
daughter. This claimed deduction is disallowed.
K. Claimed Deductions for Interest Expenses
In 1967 Mehdi Sabety invested $20,000 through petitioner in
fast-moving General Motors parts or in an entity known as Caspian
International Jordan. Petitioner did not sign a note or incur
personal liability to Mr. Sabety. At the rate of $250 per month
beginning in 1967, Mr. Sabety would receive, in principal and/or
interest, 15 percent of his investment each year the payments
continued.
Petitioner made payments to Mehdi Sabety in the amounts of
$3,000 for 1973, $3,000 for 1974, $2,950.96 for 1975, $3,000 for
1976, and $1,000 for 1977. He claimed interest expense paid to
Mr. Sabety of $3,250 in 1973, $3,000 in 1974, $2,950.96 in 1975,
$3,000 in 1976, and $2,404.80 in 1977. Because petitioner has
failed to prove what part of the payments represented interest
and what part represented principal, these amounts claimed as
interest expenses are disallowed.
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