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On the evidence presented, we cannot find that petitioner
received $500 in cash, plus the cost of utilities, for rent
during the relevant months of 1992. Petitioner has failed to
prove that Murray paid her any rent in the form of cash.
However, petitioner testified that she and Murray agreed that in
addition to paying cash rent, Murray would pay rent by making
certain repairs and by maintaining the property during his
occupancy. It is well settled rent paid in the form of services
rather than cash does not prevent the arrangement from
constituting a rental of the property. McBride v. Commissioner,
50 T.C. 1, 8 (1968); see also sec. 1.61-2(d)(1), Income Tax Regs.
Thus, we consider whether the value of Murray's services was
equal to a fair rental for the property.
The exclusive broker agreement that petitioner signed with
Cornish & Carey describes the property as "well maintained" with
a yard that is "manicured". Furthermore, Charlene Chanteloup,
the listing sales agent for Cornish & Carey, testified that "the
garden was lovely", "well maintained", and in "very, very nice
condition", and that the property, including the interior of the
house, was in very good condition. On the evidence presented, we
are satisfied that the repair and maintenance work was actually
performed.
At trial, petitioners presented expert witness testimony as
to the fair market rental value of the property. Expert witness
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