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during the year in issue.
Section 212(2) allows a deduction for the ordinary and
necessary expenses related to rental property. Section 262
precludes deductions for personal living expenses.
Petitioner testified at trial that during 1997 he rented the
Hallwood residence for the entire year to a tenant for $300 per
month. Petitioner contends that his personal use of the Hallwood
residence was limited to his own bedroom. Yet he used the
residence, except for the tenant’s room.
After a review of the record, we find that during the year
in issue petitioner maintained personal use of the entire
Hallwood residence, with the lone exception of the tenant’s room.
Petitioner’s claimed rental expense deductions, which represented
most of his expenses in maintaining his residence, were
unwarranted and not supported by the record. Most of his
expenses were personal expenses not deductible under section 262.
Accordingly, we sustain respondent’s determination as to the
allowable rental expenses.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
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Last modified: May 25, 2011