- 5 - Nelson and Dr. Schwalbach negotiated the stated rent, but Dr. Schwalbach's main intent during the negotiations was to secure Dr. Nelson’s presence in the building 1 day a week in order to further petitioner's business. But for Dr. Nelson, the River Falls area did not have an orthodontist before 1994. The Schwalbachs own a commercial building (the Hudson building) in Hudson, Wisconsin, a city that is close to River Falls. The Hudson building is similar to the River Falls building in terms of quality and available space, but the Hudson building is dissimilar to the River Falls building in that the former is unimproved space whereas the latter is tailored to the needs of a dental practice. During the subject years, Dr. Schwalbach let 530 square feet in the Hudson building for $7,500 per year (i.e., $14.74 per square foot), and he let another 468-square-foot space in the Hudson building for $6,900 per year (i.e., $14.15 per square foot). In connection with its lease of the River Falls building, petitioner claimed deductions on its 1993 and 1994 tax returns for the following amounts of rent and real estate taxes: 1993 1994 Rent $54,000 $54,000 Real estate taxes 9,113 8,128 Total 63,113 62,128 Of these amounts, respondent disallowed the following: 1993 1994 Rent $28,800 $28,800 Real estate taxes 9,112 8,040Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011