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residence. Accordingly, we find that petitioners did not enter
into their supposed rental arrangement for economic or commercial
objectives. Instead, we find that petitioners concocted this
sham arrangement solely to claim tax benefits with respect to
their principal residence and tax home in New York. There was no
real rent here except for the rent Mrs. Bittner paid to the
hospital for the apartment she was allowed to rent because she
was a full-time employee of the hospital.
For reasons set forth above, we hold that petitioners are
not entitled to the deductions for rent expense they claimed on
their 1993, 1994, and 1995 Federal income tax returns.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
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