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constitute improvements to the condo, on that record, we are not
persuaded that petitioners did not deduct as rental expenses for
years prior to the years at issue the cost of such improvements.
As for the copy of the check payable to Spa Shops on which
petitioners rely, Ms. Stoddard did not testify about that copy.
The sheet of paper on which the copy of the check appears con-
tains the following handwritten notation: “Basis For P.T.
Condo”. We are not satisfied from that notation or from any
other part of the record before us that the check payable to Spa
Shops represented a disbursement for an improvement to the condo.
As for the 1993 loan application on which petitioners rely,
Ms. Stoddard did not testify about that copy. The sheet of paper
on which the copy of the 1993 loan application appears contains
the following handwritten notation: “Condo & Boat Basis”. We
are not satisfied from that notation or from any other part of
the record before us that petitioners used all or a portion of
the 1993 loan proceeds that they received as a result of the 1993
loan application in order to make improvements to the condo.
On the record before us, we find that petitioners have
failed to carry their burden of establishing that they paid for
improvements to the condo that should be added to their cost
basis in the condo.
We turn next to respondent’s contention that, pursuant to
sections 1011(a) and 1016(a)(2), petitioners’ adjusted basis in
the condo must reflect reductions made for the depreciation
allowed or allowable, whichever is greater, under section 167(a)
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