John Charles Treadaway, Sr. - Page 8




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          1995 were the total amounts of real property taxes and utilities            
          paid with respect to petitioner’s residence.                                
               The joint returns for 1991 through 1995 claimed net operat-            
          ing loss deductions in the respective amounts of $68,739,                   
          $75,593, $48,533, $57,136, and $40,343 with respect to claimed              
          net operating loss carryovers from prior years.                             
               Petitioner and Ms. Treadaway did not report in the 1994                
          joint return the $3,000 that Ms. Treadaway received from the sale           
          of the Brenda property on May 5, 1994.                                      
               Petitioner and Ms. Treadaway did not report as income in the           
          1994 and 1995 joint returns any of the Social Security benefits             
          that they received during those years.                                      
               Respondent issued the notice with respect to 1994 and 1995             
          to petitioner and Anna P. Treadaway, deceased.4  In that notice,            
          respondent disallowed the deductions claimed for legal expenses             
          in Schedules C of the 1994 and 1995 joint returns because it was            
          not established that those claimed expenses (1) were expended,              
          (2) were expended for the purposes stated in those schedules, and           
          (3) constitute ordinary and necessary business expenses.                    
               Respondent further disallowed in the notice the deductions             
          claimed for expenses in Schedules F of the 1994 and 1995 joint              
          returns because it was not established that those claimed ex-               
          penses (1) were expended, (2) were expended for the purposes                


               4Ms. Treadaway’s first name was Anne, not Anna.                        




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