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determined a deficiency in petitioner's Federal income tax for
the year 1993 in the amount of $2,972 and an accuracy-related
penalty in the amount of $534 pursuant to section 6662(a). The
issues for decision are: (1) Whether petitioner is entitled to
Schedule E deductions in excess of the amount allowed by
respondent; (2) whether petitioner is entitled to a deduction for
a contribution to an Individual Retirement Account (IRA); (3)
whether petitioner is entitled to itemized deductions; and (4)
whether petitioner is liable for an accuracy-related penalty.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated by this reference. Petitioner resided in Elberon,
New Jersey, at the time his petition was filed.
Petitioner purchased the property located at 60 Norwood
Avenue in Elberon, New Jersey, approximately 20 years prior to
the year in issue. The property was part of an old estate of
approximately 2-1/2 acres. The original buildings included a
farmhouse, a cottage, a carriage house, a cow barn, and a second
barn. Petitioner restored and rebuilt the property, and
converted four of the buildings into rental units. Petitioner
lived on the upper level of the carriage house and used the lower
level as a studio and storage area.
During the year in issue, petitioner made various repairs
and additions to the property. After a sewer line broke,
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