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effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
Respondent determined a deficiency in petitioner’s Federal
income tax of $2,621 for the taxable year 1996.
The issue for decision is whether petitioner is entitled to
various rental activity expense deductions and miscellaneous
itemized deductions which were disallowed by respondent.
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Livermore, California, on the date the petition was filed in this
case.
For the taxable year in issue, petitioner filed with her
Federal income tax return a Schedule E, Supplemental Income and
Loss, for two rental properties. In the statutory notice of
deficiency, respondent determined that petitioner was not
entitled to deduct a portion of the expenses claimed with respect
to these rental properties, as detailed below, because it had not
been established that any of the amounts disallowed both were
paid during the taxable year and were ordinary and necessary
business expenses. The rental activity expenses which remain at
issue1 are the following:
1Respondent has conceded the notice of deficiency’s
adjustment to automobile and travel expenses with respect to the
(continued...)
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