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In Malek v. Commissioner, T.C. Memo. 1985-428, this Court
held that the taxpayer, who was employed in an administrative
position with duties very similar to those of Mrs. Zeidler with
Ladish, and who obtained a Bachelor of Science degree from
Alverno College in professional communications, had, by virtue of
the educational courses, qualified for a new trade or business.
The Court holds, therefore, that the educational expenses
incurred by petitioners in the instant cases qualified Mrs.
Zeidler for a new trade or business. Respondent, accordingly, is
sustained on this issue.
On their Federal income tax returns for 1990 and 1991,
petitioners reported on Schedule E, Supplemental Income and Loss,
gross receipts and expenses relating to two residential real
estate properties owned by petitioners. For 1992, petitioners
conveyed one of the properties to a corporation wholly owned by
them, JMZ Management, Inc. The corporation qualified as an S
corporation under section 1361, and the loss sustained by that
corporation was reported by petitioners on their 1992 individual
tax return.
In the notices of deficiency, respondent disallowed expenses
attributable to one of the rental properties for the 3 years in
question under section 280A(a) for the reason that petitioners
had used the questioned property for personal purposes during
each of the 3 years in question for periods in excess of those
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