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All section references are to the Internal Revenue Code in
effect for the taxable year in issue, and all Rule references are
to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated. All dollar amounts are rounded to the
nearest dollar, unless otherwise indicated. References to
petitioner are to Stephanya M. Barranti.
After concessions,1 the issues for decision are: (1)
Whether petitioners are entitled to deduct the $5,852 loss
sustained in renting the property to petitioner's brother and the
loss realized on the sale of petitioner's residential property.
We hold they are not. (2) Whether petitioners are liable for an
accuracy-related penalty pursuant to section 6662(a). We hold
they are.
Some of the facts have been stipulated and are so found.
The stipulated facts and the accompanying exhibits are
incorporated herein by this reference. At the time the petition
in this case was filed, petitioners resided in Alamo, California.
FINDINGS OF FACT
On February 21, 1991, petitioner acquired by gift a joint
tenancy in her grandmother's house located in San Mateo,
1Before trial, respondent conceded that petitioners are
entitled to deduct depreciation expense of $19,936, and $44,369
of the $65,187 expenses reported on Schedule C that were
disallowed in the notice of deficiency.
Petitioners conceded that they are not entitled to deduct
$20,818 of the expenses they claimed on Schedule C and that they
understated dividend income by $1,724 on their return for 1993.
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