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Respondent disallowed the deductions, and both notices of
deficiency give the same explanation for these adjustments:
"Because there is no business purpose for this transaction
your deduction is denied."
Partnership Loss Issue
Petitioner's 1987 and 1988 income tax returns claim
deductions on Schedule E, Supplemental Income Schedule, for
partnership losses in the aggregate amounts of $97,789.65
and $21,986.69, respectively. Set out below is a schedule
of the partnership losses claimed in each year:
Petitioner's
Income Tax Returns 1987 1988
Speed Line Investment ($2,091.48) ($2,035.02)
Oakbrook III, Ltd. (32,104.53) (12,453.97)
Dondi Presidents' Partnership II(7,050.85) 422.35
1626 NY Associates Ltd. Partnership(24,273.40) (4,931.60)
Bear Creek West Rental Properties(6,035.00) --
Haywood Lane Joint Venture(10,102.50) --
Murfreesboro Road Joint Venture(9,082.00) --
Lemons & Hite (751.37) (646.29)
Dondi Motor Car Properties(2,166.00) (2,283.98)
Berkley Apartments Ltd. Partnership(4,067.51) (640.68)
Caprice Investments (271.51) --
Freeport-McMoran 206.50 594.00
Energy Partners., Ltd. -- --
Freeport-McMoran -- 6.50
Resource Partners., Ltd. -- --
(97,789.65) (21,968.69)
Mrs. Lemons' returns claim identical deductions.
The notices of deficiency issued to petitioners adjust
the above partnership losses by disallowing $57,634 of the
amount claimed in 1987 and $29,448 of the amount claimed in
1988. Both notices of deficiency provide the following
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