John N. Shelton, Jr. - Page 7

          the supplemental stipulation of facts, petitioner established,              
          that he paid real property taxes in 1994, 1995, and 1997 in the             
          amounts of $1,781.04, $1,843.55, and $4,363.16, respectively.  We           
          hold that he is entitled to deductions in these amounts for those           
          years.  Further, petitioner is entitled to deductions for 1996 of           
          $200 for water expenses and for 1995 of $777.51 for repairs.                
          Although we realize petitioner incurred many more expenses in               
          connection with the operation of the rental property, in the                
          absence of any documentation we are unable to estimate additional           
          expenses that would ordinarily be deductible.  Unfortunately,               
          petitioner has not been helpful, and, therefore, we cannot allow            
          any additional deductions because we have no basis for                      
          determining how much was paid during the years in issue.                    
               With respect to depreciation, section 167(a) and (c) allows            
          a taxpayer to claim a depreciation deduction for property held              
          for the production of income for which he established an adjusted           
          basis as provided in section 1011.  The phrase “held for the                
          production of income” has the same meaning in section 212 and               
          section 167.  Mitchell v. Commissioner, 47 T.C. 120, 129 (1966).            
               Section 168(b)(3)(B) provides that the straight line method            
          of depreciation is applicable to residential rental property and            
          section 168(c) provides for the applicable recovery period of               
          27.5 years for such property.  Further, section 168(d)(2)                   
          provides, with respect to residential rental property, that the             

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011