6
Petitioner bought the Brentwood Apartments for $104,000 in
1987. The property became part of petitioner's bankruptcy estate
when he filed his bankruptcy petition. Petitioner reacquired the
Brentwood Apartments from his bankruptcy estate for $80,000 in
1990. He depreciated the property at $4,000 per year for 2 years
and sold it for $190,000 in 1992.
F. Petitioner's Income Tax Returns and the Notices of
Deficiency
Petitioner filed his income tax returns for 1991 on March 5,
1993, and for 1992 on October 21, 1993.
Petitioner reported interest and dividend income of $2,943
in 1992. He reported no gain from the sale of the Brentwood
Apartments for 1992.
Petitioner deducted rental interest expenses on Schedule E
of his 1991 and 1992 tax returns. Respondent determined that
petitioner's deductions should be reduced as follows:
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