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$20,938 ($161 for mortgage interest and $20,777 for
depreciation).
Respondent argues that petitioner is not entitled to the
amounts claimed because of his failure to substantiate the
amounts and show that the leasing activity was a trade or
business and/or a profit-seeking activity. The lease of the road
construction and related machinery was integrated with the joint
venture and lending activity between petitioner and Ms. Jackson.
We have already decided that the overall activity was a trade or
business, in the form of a joint venture, and that the leasing
activity is covered within our analysis in the preceding issue.
Based on our prior findings and analysis, we find that
petitioner's leasing activity was a trade or business and/or an
activity entered into for profit.
The record here supports petitioner's ownership of $100,000
of equipment that he leased to Cities. Petitioner, however, has
not substantiated any of the amounts claimed for legal fees,
mortgage interest, or "other expenses" which he claimed on the
Schedules C. With respect to the amounts claimed for insurance,
the $40,000 amount has been found to be a part of petitioner's
capital investment in the joint venture with Ms. Jackson. The
other amount claimed for insurance ($3,516) has not been
substantiated by petitioner.
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