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Petitioner maintained at trial that he was engaged in a
trade or business during 1991.
The determinations of the Commissioner in a notice of
deficiency are presumed correct, and the burden is on the
taxpayer to prove that the determinations are in error. Rule
142(a); Welch v. Helvering, 290 U.S. 111 (1933). Moreover,
deductions are a matter of legislative grace, and the taxpayer
bears the burden of proving that he or she is entitled to any
deduction claimed. Rule 142(a); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, supra.
The principal issue is whether petitioners were engaged in a
trade or business activity during 1991, and, if so, what was that
activity. At trial, petitioner generally described several
activities as follows:
Well, go back to the several businesses that we were
trying to conduct at the time. One is the business of
renting houses, one is the business of incorporation,
one is the business of buying and selling property. To
get a second opinion or a good opinion--shall we buy
this piece of property or not? If we buy it, shall we
build a house on it? If we build a house on it, how
much do we set aside?
And we actually * * * bought pieces of property
and we built solar houses on them. So that was one of
the things, and testing further new inventions.
6(...continued)
checks submitted by petitioner.
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