Steven K. Stoddard and Ellen M. Stoddard - Page 14




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          made those determinations because petitioners did not establish             
          their entitlement to a casualty loss deduction for 1997.                    
               Respondent also determined in the notice that petitioners              
          realized a long-term capital gain of $211,000 for 1995 from the             
          sale of the condo and that they understated the amount of such              
          gain in their 1995 joint return by $185,796.  In determining that           
          petitioners realized $211,000 from the sale of the condo, respon-           
          dent determined that petitioners’ adjusted basis in the condo at            
          the time of its sale was zero.                                              
               Respondent further determined in the notice to disallow                
          rental expense deductions of $29,383 and $17,438 claimed in                 
          Schedules E of the 1996 and 1997 joint returns, respectively.               
          Respondent made those determinations because petitioners did not            
          establish that the deductions claimed were for amounts (1) that             
          petitioners expended or (2) that petitioners expended for the               
          purpose(s) claimed.                                                         
               Respondent also determined in the notice to disallow a                 
          mortgage interest deduction of $21,846.03 in Schedule A of the              
          1996 joint return.  Respondent made that determination because              
          petitioners did not establish that the deduction claimed was for            
          an amount (1) that petitioners expended or (2) that petitioners             
          expended for the purpose claimed.                                           
               Respondent further determined in the notice that petitioners           
          are liable for each of the years at issue for the accuracy-                 







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