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deductions would still be in question because the claimed rental
property was the first floor of their personal residence which
was purportedly being rented to their own alleged business. We
uphold respondent’s determinations regarding the business and
rental expenses.
The second issue for decision is whether petitioners are
entitled to a child care credit in excess of the amount allowed
by respondent or, alternatively, entitled to exclude from income
the cost of child care services under section 129. Petitioners
claimed a credit of $960, of which respondent disallowed $894.
Petitioners do not contend that they are eligible for the
section 21 child care credit in any amount greater than that
allowed by respondent. We so hold. Rather, they argue that $894
(or some greater amount) of child care services should be
excluded from income under section 129. Section 129(a) provides
that “Gross income of an employee does not include amounts paid
or incurred by the employer for dependent care assistance
provided to such employee if the assistance is furnished pursuant
to” certain types of programs. Petitioners have not established
that any of the income reported on their return was an amount
paid or incurred by an employer for dependent care assistance.
They are therefore not entitled to exclude any such amount from
income.
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