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For the Florida property, petitioners had independent
contractors that they would call to perform work if they were not
physically present to do the repairs or maintenance. Petitioners
hired Katherine Morgan to landscape and Sandy Chief to perform
maintenance on the Florida property.
The New York property was approximately 129 acres and
consisted of two houses, two storage units, a workshop, farmland,
and a tree plantation. Neither of the houses on the New York
property was rented in 1994 and 1995. A portion of the grounds
was arable and was farmed by Dan Zittle in 1994 and 1995.
Petitioners did not receive any rents on the New York property in
1994 and received $2,326 in rent on the New York property in
1995. For the New York property, petitioners hired an individual
to do simple tasks such as trimming around the buildings and
plowing snow from driveways. Petitioners also hired an
excavating contractor, a plumber, and an electrician.
Petitioners claimed rental losses of $45,676 and $51,206 in
1994 and 1995, respectively, on their Schedule E, Supplemental
Income and Loss. Petitioners did not elect to aggregate their
real property rental activities for purposes of section 469.
Interest Expense
Respondent examined petitioners’ 1989, 1990, and 1991 income
tax returns and proposed adjustments to petitioners’ Schedule A,
Itemized Deductions, and Schedule C, Profit or Loss From
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