Ronald P. Barranti and Stephanya M. Barranti - Page 14

                                       - 14 -                                         

               Petitioners deducted $5,852 on Schedule E as a loss                    
          sustained in renting petitioner's property during 1993.4  In                
          addition to a depreciation expense of $2,895, petitioners                   
          deducted $415 for repairs, $80 for cleaning and maintenance,                
          $2,900 for the cost of recovering the floors in carpet and vinyl,           
          $415 for the replacement of the garage door, and $521 for                   
          insurance expense.5  Respondent disallowed these expenses because           
          petitioners did not provide any evidence that the property                  
          actually was rented, or substantiate the expenses.                          
               We have found that petitioner rented the property to Murray            
          for a below-market rental amount.  Murray is petitioner's                   
          brother.  A brother is a family member as defined in section                
          267(c)(4).  Accordingly, the property constitutes a dwelling unit           
          used as a residence by petitioner under section 280A, and                   
          petitioner is not entitled to deduct the rental expenses other              


               4Petitioners stipulated that they actually paid $300 in                
          property taxes, rather than the $1,639 they claimed on their                
          return.  At trial petitioner conceded that a reported utilities             
          expense of $402 was claimed in error.                                       
               5Petitioners submitted copies of some documents to verify              
          these expenses.  The carpet and vinyl vendor's invoice is dated             
          Apr. 27, 1992, and shows the cost was actually $2,850.  The copy            
          of the insurance company's statement shows that the coverage was            
          from Nov. 28, 1992 to Nov. 28, 1993, and that $176.84 was paid on           
          Nov. 9, 1992.  Thus, these expenses were incurred and paid in a             
          year other than the one at issue.                                           
               The invoice for the garage door is dated after petitioner              
          quit her rental activity.  This expense was incurred to fix up              
          the property for sale and is an adjustment to the amount                    
          realized.                                                                   




Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011