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Based on the evidence presented at trial, the Court is
satisfied that petitioners did not use the questioned property as
a residence for each of the years at issue for periods that would
exceed the time periods set out in section 280A(d)(1). Although
petitioners made several visits to the property during the years
in question and, on one or two occasions used the property as a
residence well under the 14-day/10 percent standard, the visits
to the property were essentially for maintenance. The Court,
therefore, sustains petitioners on this issue, that section
280A(c)(5) does not preclude petitioners from claiming losses
from this property in excess of the rentals therefrom.
Respondent's alternative adjustment to petitioners'
deductions from rental activities relates to the 1991 tax year on
the same property discussed above, as to which $313 expenses for
supplies, $596 for meals, and $1,059 for automobile travel were
disallowed for lack of substantiation. On this record, the Court
sustains respondent as to the three items. Petitioners presented
no proof, such as bills, receipts, or canceled checks, to
establish that they incurred the $313 expense for supplies. As
to the automobile and meal expenses, records for these expenses
were also not produced. Section 162(a) allows a deduction for
all ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business, including,
under section 162(a)(2), "traveling expenses (including amounts
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