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agreement to sell the property, and, further, that she spent
substantial sums in preparing the property for sale, she has
failed to demonstrate that she is entitled to deduct any of the
claimed expenditures in either 1989 or 1990. Deductions are a
matter of legislative grace, and a taxpayer claiming a deduction
bears the burden of clearly showing that the terms of the
applicable statute have been satisfied. INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Holmes v. United States, 85
F.3d 956 (2d Cir. 1996); Stark v. Commissioner, T.C. Memo.
1999-1.
Petitioner initially claims that she may deduct these
expenditures as business expenses under section 162 or as
expenses for the production of income under section 212. Here,
however, the details concerning the property in Hawaii and its
disposition are too vague and contradictory to support such
deductions. For example, there is evidence that, in May of 1990,
petitioner’s sister in Hawaii sent petitioner $1500 in the form
of credit from a bank in Hawaii. On brief, petitioner maintains
that she received this $1,500 "back in regard to expenses paid."
This suggests that the amounts petitioner expended upon the
property in 1989 were loans or advances to her sister, rather
than expenses of her own. She has not demonstrated otherwise,
and we hold that she is not entitled to deduct the claimed
expenditures under either section 162 or 212 in 1989 or 1990.
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