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On the record before us, we find that petitioner has failed
to carry his burden of establishing that he is entitled to deduct
any of the claimed Schedule E expenses for 1991 and 1992 relating
to the Sanchez Street property.105
Fraud Penalty Under Section 6663(a)
Respondent determined that petitioner is liable for each of
104(...continued)
testimony regarding the method by which the expenditures relating
to the Sanchez Street property were paid. Mr. Dubrovsky ini-
tially testified that all of the investors in the Sanchez Street
property gave him money, which he deposited into a bank account,
and that he paid the expenses relating to that property from that
account. Mr. Dubrovsky later testified that the rent collected
from the Sanchez Street property was used to pay all of the
expenses relating to that property. In this regard, petitioner
and Ms. Brodsky claimed in each of the 1991 and 1992 Schedules E
with respect to the Sanchez Street property a total amount of
deductions, excluding depreciation, that exceeded the total
amount of rent that they reported. Even if we were to rely on
Mr. Dubrovsky’s testimony that petitioner was liable for his
share of the expenses on the Sanchez Street property, that
testimony does not establish the extent of petitioner’s ownership
in that property, the amount, if any, of expenditures relating to
that property for which petitioner was responsible during those
years, and that petitioner paid the expenditures that he and Ms.
Brodsky claimed in the 1991 and 1992 Schedules E with respect to
that property.
105Because we have found that petitioner has failed to carry
his burden of establishing that he is entitled to deduct any of
the claimed Schedule E expenses for 1991 and 1992 relating to the
Sanchez Street property, petitioner does not have a loss for
either of those years relating to that property. Assuming
arguendo that we had found that petitioner did have a loss for
1991 and 1992 relating to the Sanchez Street property, we find on
the record before us that petitioner has failed to carry his
burden of establishing the amount with respect to which he was at
risk under sec. 465 for that property for those years. See sec.
465(a) and (b). We further find on that record that petitioner
has failed to carry his burden of establishing that any loss
relating to the Sanchez Street property for 1991 and 1992 did not
constitute a passive activity loss under sec. 469 for those
years. See sec. 469(a), (c).
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