Mahendra K. Tandon - Page 20

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          Cadillac.  We conclude that petitioner has substantiated that he            
          paid $63.59 in sales tax on a motor vehicle in 1986 and is                  
          entitled to a deduction in this amount.                                     
               E.   Partnership Losses                                                
               During 1985, 1986, and 1987, petitioner was a 25-percent               
          partner in a real estate partnership called Horizon Partners.               
          Petitioner, on his 1985, 1986, and 1987 tax returns, claimed loss           
          deductions from Horizon Partners in the amounts of $5,191.33,               
          $4,171.25, and $3,876.25, respectively.  Respondent argues that             
          petitioner has not established his adjusted basis in Horizon                
          Partners during the years in issue and therefore is not entitled            
          to deduct any partnership losses.  Petitioner argues that he has            
          established his basis in Horizon Partners.                                  
               Section 704(d) allows a partner's distributive share of                
          partnership loss as a deduction only to the extent of the                   
          adjusted basis in his partnership interest at the end of the                
          partnership year in which the loss is incurred.  Petitioner                 
          testified that in 1983 he invested $6,600 in Horizon Partners.              
          There is, however, no evidence of the amount of his adjusted                
          basis during the years in issue or of the adjustments he made to            
          his basis in previous years.  Petitioner did not demonstrate that           
          he is entitled to deduct his proportionate share of partnership             
          losses from Horizon Partners in 1985, 1986, or 1987.  We                    

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