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From Business, of the return. Petitioners reported Schedule C
losses of $36,747 and $12,668, respectively, for 1992 and 1993.
In the notices of deficiency, respondent made no adjustments to
the Schedule C income and expenses reported by petitioner and Mr.
Gurr on their 1992 and 1993 returns, thereby allowing the losses
claimed. Each of the 1992 and 1993 tax returns also included a
Schedule D, Capital Gains and Losses, with respect to certain
real estate transactions. On the Schedule D for 1992, among
other transactions reported on that Schedule, petitioner and Mr.
Gurr reported a long-term capital loss of $173,387 from two real
estate transactions. On that same Schedule D, petitioner and Mr.
Gurr reported a long-term capital gain of $7,768 from a separate
real estate transaction. In the notices of deficiency,
respondent disallowed the $173,387 long-term capital loss for
lack of substantiation. Respondent also determined that the
reported $7,768 long-term capital gain constituted ordinary
income to the extent of $6,925.
On their 1993 return, petitioner and Mr. Gurr claimed a
Schedule D short-term capital loss of $1,000 from the sale of
real estate, a long-term capital loss of $16,400 as guarantors on
two notes, and long-term capital gains from installment sales of
$12,673. In the notices of deficiency, respondent disallowed
these two losses for lack of substantiation. Respondent further
determined that $1,082 of the Schedule D long-term capital gain
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