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The Schedule C filed with petitioners' 1991 return fails to state
the principal business or profession, the business name, and the
business address of petitioners' trade or business activity.
Petitioners reported the rental income and other expenses from
their rental houses in Prince George's County, Maryland, on
Schedule E, Supplemental Income and Loss, of their 1991 Federal
income tax return, which included a detailed statement of their
rental expenses, separately listing each category of expense and
identifying each amount separately as to each house for which the
expense was incurred. Based on the testimony at trial, the
expenses incurred by petitioners for the Florida condominium were
claimed on Schedule C as trade or business expenses.
In the notice of deficiency, respondent disallowed all of
the expenses claimed by petitioners on Schedule C of their 1991
return for the following reasons: (1) Petitioner and Mrs.
Thomason failed to establish that a valid business activity was
in existence during 1991; (2) expenses relative to the Florida
condominium were not deductible as a Schedule C activity;
(3) expenses relative to the corporation were deductible by the
corporation on a corporate return; and (4) expenses relative to
rental units were deductible on Schedule E and had "already been
considered" on that schedule.5
5
On Schedule E of their 1991 return, petitioners reported
gross rental income from 14 properties totaling $114,860, total
(continued...)
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