- 3 -
ing seven parcels until the lenders foreclosed on them during
1995. Mr. Blythe acquired and held title to the ten parcels in
question for the purpose of producing rental income from such
parcels. He did not acquire and hold title to those parcels for
the purpose of selling them with a view to the gains and profits
that might be derived from such sales.
Throughout the various periods during which Mr. Blythe held
title to the ten parcels, the respective occupants of those
parcels made rental payments to petitioners. Throughout those
periods, petitioners did not pay any property taxes or make any
mortgage loan payments with respect to any of those parcels. Nor
did Mr. Blythe offer or advertise any of them for sale.
In Schedule C of their return for 1994 (1994 Schedule C),
petitioners reported the rental payments that they received
during that year from the ten parcels in question as gross
receipts from a business which they described as "Property Mgmt".
Petitioners reported no other gross receipts or income in their
1994 return. Petitioners claimed in their 1994 Schedule C total
expenses of $54,372.2 Those expenses did not include any claimed
depreciation. Petitioners reported in their 1994 Schedule C a
net profit of $5,229. Each of them reported in a separate
Schedule SE, Self-Employment Tax, of their 1994 return (1994
Schedule SE) about one-half (viz. $2,615) of that claimed 1994
Schedule C net profit and "Net earnings from self-employment" of
2 In fact, the various expenses that petitioners claimed in
their 1994 Schedule C total $54,880, not $54,372.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011