-4-
and 1402(a)(5)(A). See Charlton v. Commissioner, 114 T.C. 333,
337 (2000). We denied rental cabin deductions because they were
preoperational expenses. See id. at 338. We held that Charlton
qualifies for limitation of liability under section 6015(c) to
the extent that the unreported Medi-Task income is allocable to
Hawthorne. See id. at 340-342. Charlton improperly netted the
Medi-Task income and expenses petitioners had reported with
expenses of the rental cabins to compute self-employment income.
That error caused a self-employment tax deficiency. An
additional self-employment tax deficiency occurred because
Charlton and Hawthorne underreported Medi-Task income. We
accepted respondent’s unopposed suggestion that the parties
allocate items under section 6015(d) as part of the Rule 155
computations. See id. at 342.
After we filed our opinion in Charlton v. Commissioner,
supra, respondent determined that Hawthorne is entitled to relief
under section 6015(f).
Discussion
Respondent contends that the tax on Medi-Task income and the
increase in self-employment tax attributable to the unreported
Medi-Task income are allocable to Hawthorne, and that the
deficiency to the extent that it was attributable to denied
rental cabin deductions is allocable to Charlton. Charlton
contends that deductions for $2,050 of unclaimed Medi-Task
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