- 8 - In 1992, petitioners claimed a deduction for rental expenses in the amount of $16,000. Respondent has agreed that petitioners were entitled to deduct $8,374 of the $16,000 claimed deduction. Respondent estimated the monthly rental payment to Hub Properties to be $1,350 on the basis of the prior lease contract adjusted for an estimated increase. Petitioners presented no substantiation to reflect the actual payments to Hub Properties. Respondent allowed 3 months (January to March of 1992) of rental expenses paid to Hub Properties but disallowed any allowance for April. On April 29, 1992, petitioners relocated to Rialto Discount Mall, renting space from April 29 through December 31, 1992. Respondent allowed 6 months of rent based on the amounts substantiated by checks. The following summarizes respondent's computations: Hub Properties: January 1992 $1,350 (no substantiation) February 1992 1,350 March 1992 1,350 April 1992 -0- Rialto Discount Checks of 1952 Mall 728 728 728 800 388 Rental expenses allowed $8,374 1 The full amount of the check was $1,680, but $728 of the payment was the security deposit. Petitioners argue that respondent should have allowed the April payment to Hub Properties and the missing two monthlyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011