Marian Wilson - Page 7

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               The determination of a partner's basis in his or her                   
          partnership interest must be made before a partner can deduct his           
          or her share of partnership losses because losses cannot reduce a           
          partner's basis below zero.  Generally, a taxpayer's basis in a             
          partnership includes the taxpayer's capital contributions and her           
          share of partnership income and liabilities, less distributions             
          and her share of partnership losses.  See secs. 705, 752.  A                
          partner's distributive share of partnership loss is allowed as a            
          deduction only to the extent of that partner's adjusted basis of            
          the partnership interest at the end of the tax year in which such           
          loss occurs.  See sec. 704(d).                                              
               Automobile Expenses                                                    
               During the years at issue, petitioner claimed automobile               
          expenses arising from automobile use on behalf of both Special              
          Occasions and Special O.  Petitioner contends that she is                   
          entitled to deduct automobile expenses incurred during the years            
          in issue.  Alternatively, petitioner contends that her expenses,            
          if not deductible, should be included in her claimed bases for              
          Special Occasions and Special O.                                            
               Deductions are a matter of legislative grace, and a taxpayer           
          must be able to show that the deduction sought comes within the             
          express provisions of the statute.  See New Colonial Ice Co. v.             
          Helvering, 292 U.S. 435, 440 (1934).                                        

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