Darryl Shawn and Melonee Yevette Bundridge - Page 8

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               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 monthly                 





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