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derived the $43,123 unreported rental income by subtracting
(erroneously) from the $53,552 rental income relating to the
Lincoln Avenue I property the $10,430 that petitioner had
received and reported in income relating to the Lincoln Avenue II
property. During trial preparation, petitioner reiterated to
respondent’s counsel that during 1988 Air America and IL NA Tours
had paid him $53,552 for use of the Lincoln Avenue I property.
Petitioner’s 1988 Return
Petitioner did not review his 1988 return before he signed
it. On that return, petitioner deducted $2,450 for real estate
taxes on Schedule A, Itemized Deductions, that were paid by his
corporations. He also deducted $3,991 of unreimbursed employee
expenses even though his corporations paid his employee expenses.
In addition, petitioner deducted $4,271 of investment interest on
Schedule A of the return to which he concedes he is not entitled.
On Schedule E of the return, petitioner deducted $19,410 for
expenses other than depreciation related to the Lincoln Avenue II
property. Respondent disallowed this deduction for lack of
substantiation, and petitioner now concedes that he is not
entitled to it.
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