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nations to disallow the deductions claimed in Schedules F of the
1994 and 1995 joint returns. The exception is that we hold that
petitioner is entitled for 1995 to deduct from the income re-
ported in Schedule F of the 1995 joint return a total of
$10,101.37 paid for expenses relating to the horse-training
activities.13 See sec. 183(b)(2).
With respect to the claimed legal expenses that were de-
ducted in Schedules C of the joint returns for 1994 and 1995, on
the instant record, we find that petitioner has failed to estab-
lish that those claimed legal expenses (1) were paid during those
years, (2) were paid for the purpose stated in those schedules,
and (3) constitute ordinary and necessary business expenses under
section 162(a). Accordingly, we sustain respondent’s determina-
tions to disallow those claimed deductions for the years at
issue.
With respect to the $3,000 that Ms. Treadaway received
during 1994 from the sale of the Brenda property which was not
reported in the 1994 joint return, on the instant record, we find
that petitioner has failed to show (1) that Ms. Treadaway had a
basis in excess of zero in the Brenda property and (2) that that
amount should not be included as capital gain for 1994. Conse-
quently, we sustain respondent’s determination to include $3,000
13Schedule F of the 1995 joint return reported income of
$32,170 from the horse-training activities.
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