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Respondent determined deficiencies of $1,924, $2,479, and
$3,146 in petitioners' Federal income taxes for 1995, 1996, and
1997, respectively.
The issues for decision are: (1) Whether, for 1995, 1996,
and 1997, petitioners are entitled to deduct travel expenses of
$37,668, $36,393, and $14,726, respectively, in connection with
an air racing activity of David L. Rose (petitioner); (2)
whether, for each of the years at issue, petitioners are entitled
to deduct labor expenses in connection with petitioner's air
racing activity in excess of amounts allowed by respondent; and
(3) whether, for 1996, respondent properly disallowed $8,737 of
petitioners' claimed basis in a 1970 Plymouth Barracuda
automobile sold during that year. The remaining adjustments to
petitioners' itemized deductions, for each of the years at issue,
are computational and will be resolved by the Court's holdings on
the aforementioned issues.
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioners’
legal residence was La Jolla, California.
Petitioner was a commercial airline pilot for American
Airlines for 33 years prior to his retirement in May 1997. In
general, commercial airline pilots are required to retire at age
60, and that was the reason for petitioner's 1997 retirement.
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