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Respondent determined deficiencies in petitioners’ Federal
income taxes of $4,130 and $3,934 for the taxable years 1994 and
1996, and a section 6651(a)(1) addition to tax of $161.25 for
taxable year 1994.
The issue for decision is whether petitioners materially
participated in the rental of a certain condominium unit during
1994 and 1996.1
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Schaghticoke, New York, on the date the petition was filed in
this case.
During 1994, petitioner husband (petitioner) was employed as
a chemical engineer, and petitioner wife was employed as a
registered nurse. During 1996, petitioner retired, and
petitioner wife was employed as a certified nurse midwife.
During both of the years in issue, petitioners owned a
condominium unit in North Topsail Beach, North Carolina. The
condominium association management company, CAM Inc., provided
1Petitioners did not address at trial the sec. 6651(a)(1)
addition to tax for failure to file a timely return. We
consequently consider this addition to tax to be undisputed by
petitioners. However, we note that the record supports
respondent’s determination that the addition to tax was
applicable, because petitioners’ 1994 Federal income tax return
was filed on a 1996 form and was signed by petitioners on January
15, 1997.
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