- 13 - property as well as recurring income such as rent. Mitchell v. Commissioner, 47 T.C. 120, 128 (1966). In light of petitioner's other real estate activities in Florida, we believe he originally acquired and held the house with the expectation of realizing gain upon its disposition. We conclude that petitioner reasonably believed that the house was depreciable. Therefore, he had reasonable cause and acted in good faith, and the underpayment arising from the disallowed depreciation is not attributable to negligence. Secs. 6662(b)(1), 6664(c)(1); see Rezazadeh v. Commissioner, T.C. Memo. 1996-245, affd. without published opinion 132 F.3d 36 (7th Cir. 1997). Miscellaneous Expenses The following chart lists various additional expenses claimed by petitioner on Schedule C for 1990 and 1991 that were challenged by respondent. The second column shows the amount to which the parties have stipulated that petitioner is entitled, the third column shows the amounts originally claimed by petitioner on his returns, and the fourth column shows the difference; i.e., the amount petitioner claimed to which he now concedes he is not entitled. Expense Stipulated Claimed Difference 1990 Taxes $2,719 $3,100 $381 1991 Taxes 4,976 6,139 1,163 1990 Utilities 1,637 1,861 224 1991 Miscellaneous1 7,101 9,942 2,841 1Aggregate figure for legal fees, utilities, insurance, and rent.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011