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these repairs and improvements or to authorize TMC to make them.
If they failed to comply by certain dates, TMC would arrange for
the work to be performed by its employees or subcontractors and
charge petitioners accordingly.
Petitioners traveled to Bluefin Bay 4 to 6 times during each
of the taxable years in issue. In most cases, petitioners would
stay at Bluefin Bay in their unit for a long weekend. They also
spent one full week each year in their unit. Petitioners' trips
to Bluefin Bay usually combined family vacations with owner
activities such as attending board meetings and/or making some
repairs to their unit. Petitioner husband also participated in
BBCA meetings at locations close to petitioners' residence during
the taxable years in issue.
On Schedules C attached to their 1991, 1992, and 1993
returns, petitioners reported the following amounts with respect
to the rental of their unit:
1991 1992 1993
Gross Income $32,380.34 $31,281.31 $37,174.23
Total Expenses (41,463.72) (40,864.03) (43,834.35)
Net Loss ( 9,083.38) ( 9,582.72) ( 6,660.12)
Petitioners claimed business loss deductions on their 1991,
1992, and 1993 returns in amounts equal to the amounts of their
net losses reported on the Schedules C. In the statutory notice
of deficiency, respondent disallowed the claimed business loss
deductions on the ground that the claimed losses were sustained
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Last modified: May 25, 2011