Alonzo and Emma J. Bradley - Page 15

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          the amount of $1,500 dated August 31, 1992, and endorsed on                 
          behalf of "Utica Deca Corporation."  Mr. Bradley testified that             
          he paid this amount as a management fee to have the property                
          monitored to prevent unauthorized woodcutting or hunting.  Under            
          section 212(2), a deduction is allowable for expenses that are              
          ordinary and necessary "for the management, conservation, or                
          maintenance of property held for the production of income."  The            
          regulations promulgated under section 212 provide that the term             
          "ordinary and necessary" means that the expenses must be                    
          reasonable in amount and bear a reasonable and proximate relation           
          to the management, conservation, or maintenance of property held            
          for such purposes.  Sec. 1.212-1(a)(2), (d), Income Tax Regs.               
          The term "held for the production of income" includes held for              
          appreciation in value, whether to maximize gain or to minimize              
          loss.  See sec. 1.212-1(b), Income Tax Regs.  On this record, we            
          find the management fees satisfy section 212(2) and decline to              
          sustain respondent's disallowance of the deduction for them.                
          Addition to Tax for Failure To File a Timely Return                         
               Section 6651(a)(1) imposes an addition to tax for failure to           
          file timely Federal income tax returns unless the taxpayer shows            
          that such failure was due to reasonable cause and not willful               
          neglect.  United States v. Boyle, 469 U.S. 241, 245 (1985).  To             
          prove "reasonable cause", a taxpayer must show that he exercised            
          ordinary business care and prudence and was nevertheless unable             
          to file the return within the prescribed time.  Crocker v.                  




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