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Respondent determined a deficiency of $5,331 in petitioners'
Federal income tax for 1991.
The issues for decision are: (1) Whether petitioners were
engaged in a trade or business activity within the intent and
meaning of section 162(a) and, (2) if petitioners were not
engaged in a trade or business activity under section 162(a),
whether some or all of the expenses claimed as trade or business
expenses are otherwise deductible under section 212(1) and (2) as
expenses paid or incurred for the production or collection of
income or for the management, conservation, or maintenance of
property held for the production of income.
Some of the facts were stipulated, and those facts, with the
annexed exhibits are so found and are incorporated herein by
reference. At the time the petition was filed, petitioners'
legal residence was Fort Washington, Maryland.
Harry E. Thomason (petitioner) and Hattie D. Thomason (Mrs.
Thomason) were married in 1947, and, during the following year,
petitioner became employed as a patent examiner by the U.S.
Patent Office in Washington, D.C. In 1949, petitioner and Mrs.
Thomason bought a parcel of real estate in Prince George's
County, Maryland, and began building several rental houses there
over a period of years. The houses were built substantially by
1(...continued)
estate of the deceased petitioner. Rule 63.
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