Randy L. and Julie J. Wysong - Page 2

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          corresponding increase in the amount of flow-through income from            
          Wysong Medical to petitioners.                                              
               We must decide whether petitioners' share of ordinary income           
          from Wysong Medical should be increased by the amounts of $85,587           
          and $42,750 in 1992 and 1993, respectively.  Our answer to this             
          question rests on whether amounts paid as rent by Wysong Medical            
          to Wysong Corp. represented ordinary and necessary expenditures             
          under section 162(a)(3).  We answer this question in the negative           
          and thereby hold that petitioners' share of ordinary income                 
          should be increased by the stated amounts.  Unless otherwise                
          stated, section references are to the Internal Revenue Code in              
          effect for the years in issue.  Rule references are to the Tax              
          Court Rules of Practice and Procedure.                                      
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulated facts and exhibits submitted therewith are                   
          incorporated herein by this reference.  Petitioners, husband and            
          wife, resided in Midland, Michigan, when they petitioned the                
          Court.  They filed timely joint 1992 and 1993 Federal income tax            
          returns.                                                                    
               Petitioners own a commercial building (the Eastman Building)           
          located in Midland, Michigan.  The Eastman Building currently               
          contains a total of 25,196 square feet, consisting of 15,400                
          square feet of warehouse space, 3,500 square feet of office area,           





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