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tional amounts, such as the amounts that petitioner received when
he cashed, and did not deposit, in whole or in part certain
checks or when he used certain checks to purchase certain cash-
ier’s checks.
In the notices, respondent disallowed the cost of goods sold
claimed in Schedules C for 1991, 1992, and 1993 in the respective
amounts of $12,849, $113,935, and $54,337. In the notice for
1991 and 1992, respondent also disallowed for those two years
claimed Schedule C deductions of $24,796 and $16,278, respec-
tively.
In the notice for 1991 and 1992, respondent disallowed all
of the claimed Schedule E rental expenses for 1991 and 1992 in
the amounts of $20,980 and $6,817, respectively,
because it has not been established that they were
ordinary and necessary business expenses or were ex-
pended for the purpose designated. In addition, you
have not established an ownership interest in these
properties nor has it been established that you were at
risk per section 465 of the Internal Revenue Code.
* * *
As an alternative ground for disallowing the claimed Schedule E
rental expenses for 1991 and 1992, respondent determined that
the claimed losses are not allowable per Section 469 of
the Internal Revenue Code because you did not actively
participate in the management of the rental properties
and because you have no other passive income to offset
the passive losses.
In the notice for 1991 and 1992, respondent also determined
that, instead of the $27,000 loss which petitioner and Ms.
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