- 15 -
than those specified in section 280A(b). No other rental
expenses are allowable under section 280A, because during 1993
the property was never rented at a fair rental. See sec.
280A(e); McDonald v. Commissioner, T.C. Memo. 1991-242; Bindseil
v. Commissioner, T.C. Memo. 1983-411; Gilchrist v. Commissioner,
T.C. Memo. 1983-288; Saunders v. Commissioner, T.C. Memo. 1982-
322.
Loss on Sale
Section 165 allows individual taxpayers to take a
deduction for losses incurred in a "trade or business" and "any
transaction entered into for profit". Sec. 165(c)(1) and (2).
Accordingly, once it has been established that a taxpayer held
property in a trade or business or for the production of income
and that his or her motives were profit driven, that individual
may, subject to certain limitations,6 deduct any subsequent loss
incurred on the disposition of the property.
Trade or Business
Petitioners assert that petitioner was engaged in the trade
or business of renting her property. The Supreme Court has
stated that to be engaged in a trade or business, the taxpayer
must be involved in the activity with continuity and regularity,
6For example, if an individual taxpayer sustains a loss on
the sale of a capital asset, the taxpayer's deduction for that
loss would ordinarily be subject to the limitations applicable to
capital losses, notwithstanding that the property was held for
the production of income. See sec. 1211.
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