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Respondent determined deficiencies in petitioner's Federal
income taxes for the taxable years 1993 and 1994 in the amounts
of $4,084 and $2,561, respectively. Respondent also determined
accuracy-related penalties under section 6662(a) for negligence
or intentional disregard of rules or regulations for the same
taxable years in the amounts of $816.80 and $512.20,
respectively.
After concessions by the parties,2 the issues for decision
are as follows:
(1) Whether petitioner is entitled to dependency exemptions
for three individuals in 1993 and one individual in 1994. We
hold that he is not.
(2) Whether petitioner qualifies for head-of-household
filing status in 1993 and 1994. We hold that he does not.
2 Petitioner concedes that he received unreported rental
income in the amounts of $5,400 in 1993 and $2,025 in 1994; that
he received State income tax refunds in the amounts of $224 in
1993 and $414 in 1994; and that he paid mortgage interest and
real estate taxes in the respective amounts of $2,920 and $1,963
in 1994.
Respondent concedes that petitioner's State income tax
refund received in 1994 is not taxable if petitioner did not
receive a tax benefit in respect of such tax (i.e., if
petitioner's itemized deductions for 1993 do not exceed the
standard deduction for 1993); that petitioner's mortgage interest
and real estate taxes should be allocated equally between
Schedule A and Schedule E in 1994; and that petitioner is
entitled to Schedule E deductions in 1994 for cleaning and
maintenance in the amount of $600 and repairs in the amount of
$1,350.
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