- 3 -
Petitioners purchased the residence of petitioner wife's
parents, Mr. and Mrs. Charity, and her maternal grandmother (the
Charitys) in 1987. This residence is located at 2117 Hollins
Court. The Charitys continued to use 2117 Hollins Court as their
residence after the sale and paid petitioners rent for such use.
The first issue for decision is the amount of rents received
by petitioners during the taxable years in issue.
On Schedules E attached to their 1990, 1991, and 1992
returns, petitioners reported "rents received" from 2117 Hollins
Court in the amount of $7,200 per year. This amount is equal to
the fair rental value appraisal of 2117 Hollins Court obtained by
petitioner in 1988 from Eagle Realty, a local real estate agency.
In the statutory notice of deficiency, respondent determined that
petitioners received rents from 2117 Hollins Court during 1990,
1991, and 1992 in the amounts of $8,400, $8,400, and $11,700,
respectively.
Section 61(a) includes in gross income all income from
whatever source derived including, but not limited to, rents.
See sec. 61(a)(5).
Petitioner husband testified that the Charitys paid $500 per
month as rent during the taxable years in issue. He further
testified that petitioners reported their "rents received" on
their tax returns as $7,200 per year ($600 per month), on the
advice of one of respondent's revenue agents, in order to satisfy
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011