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the "fair rental requirement" of section 280A. Respondent's
counsel stated at trial that the "rents received" determined in
the statutory notice of deficiency were based on bank records and
statements from the Charitys. The record does not include any
such evidence, and respondent's counsel's statement alone does
not have any probative value.
Based on petitioner husband's testimony and the lack of any
evidence which supports respondent's determinations of the "rents
received", we find that the Charitys paid $500 per month during
the taxable years in issue for their use of 2117 Hollins Court.
We hold that petitioners received rents in the amount of $6,000
during 1990, 1991, and 1992.
The second issue for decision is whether petitioners are
entitled to any deductions with respect to 2117 Hollins Court.
Petitioners claimed rental expenses for 1990, 1991, and 1992
in the amounts of $25,453, $23,586, and $23,859, respectively.
In the statutory notice of deficiency, respondent limited the
deductible amounts of petitioners' substantiated expenses to the
rents which he determined they had received on the ground that
"the rental arrangement with [their] relatives was not at fair
market value." Respondent also determined that petitioners only
substantiated $11,735, $14,717, and $12,247, respectively, of the
expenses claimed on their 1990, 1991, and 1992 returns.
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