- 2 - Respondent determined a deficiency of $2,079 in petitioner’s 1996 Federal income tax.2 The issue is whether petitioner’s real estate rental income constitutes “disqualified income” under section 32, and, as such, exceeds the 1996 allowable maximum disqualified income of $2,200 for earned income tax credit eligibility. Petitioner resided in Danville, Virginia, at the time the petition was filed. Background The applicable facts may be summarized as follows. Petitioner is a self-employed general contractor for custom-built single family homes. In 1996, petitioner operated a home construction business on a full-time basis and a real estate rental property activity. Petitioner reported a net profit of $7,260 from the construction business in 1996. Petitioner owns a condominium and three commercial buildings. Petitioner reported gross rentals of $25,425 and a net income of $8,095 from his real estate rental property activity in 1996. Petitioner personally handled the renting, maintenance, and collections for the real estate rental property activity. He employed no agents to assist him in these endeavors, other than as required for the upkeep of the condominium under the terms of 2 Petitioner filed a joint 1996 Federal income tax return with his wife. The notice of deficiency was issued to petitioner and his wife; however, petitioner’s wife did not petition this Court and is not a party to this proceeding.Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011