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petitioners reported total income of $284,470, before deducting a
loss of $5,852 from the rental of petitioner's property and an
ordinary loss of $73,501 on its sale.
OPINION
Respondent disallowed the rental loss, because petitioners
did not provide any evidence that the property actually was
rented during the year at issue or substantiate the expenses.
Respondent determined that petitioners are not entitled to claim
a loss on the sale of petitioner's property, because they have
not proved that it was used in a trade or business or held for
the production of income. Petitioners assert that petitioner's
property was used as rental property, that petitioner was
actively engaged from May 1992 through June 1993 in the trade or
business of renting the property, and that they suffered a loss
on its rental during 1993. Respondent's determinations are
presumed correct, and petitioners bear the burden of proving that
respondent's determinations are erroneous. Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Issue 1. Whether Petitioners May Deduct the Losses
Rental Loss
Whether petitioners are entitled to deduct the $5,280 rental
loss turns on whether petitioner's property was used by
petitioner as a residence.
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