Lucian T. Baldwin, III - Page 39

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          expenditures”.  Respondent, nevertheless, allows petitioner to              
          offset LFI’s income with LFI’s expenses for 1991 and 1992, but              
          not for 1989 or 1990.                                                       
               Petitioner contends that, although legal title to Granot               
          Loma was never transferred to LFI, LFI owned a beneficial and               
          depreciable interest in the property and that LFI should be                 
          allowed to deduct depreciation to the extent provided in section            
          183(b)(2).  Petitioner relies on several cases for the                      
          proposition that command over property or enjoyment of its                  
          economic benefits marks the real owner for Federal tax purposes.            
          See Speca v. Commissioner, 630 F.2d 554, 557 (7th Cir. 1980)                
          (quoting Anderson v. Commissioner, 164 F.2d 870, 873 (7th Cir.              
          1947)), affg. T.C. Memo. 1979-120; Hang v. Commissioner, 95 T.C.            
          74, 80 (1990).  Petitioner, however, has failed to convince us              
          that LFI owned any beneficial interest in Granot Loma.  The                 
          record instead persuasively establishes that petitioners                    
          personally controlled, used, and enjoyed Granot Loma throughout             
          the years at issue.                                                         
               Regarding LFI’s other deductions, petitioner did not address           
          respondent’s argument that those deductions were unsubstantiated.           
          Ordinarily, a taxpayer is required to substantiate claimed                  
          deductions.  See sec. 1.6001-1(a), Income Tax Regs.  In this                
          case, the parties did not stipulate that LFI incurred any                   
          expenses and because petitioners introduced no evidence at trial            
          to prove the nature and amount of LFI’s expenses, we would                  

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