Steven K. Stoddard and Ellen M. Stoddard - Page 29

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          Doon Way residence are not disallowed by section 280A.16                    
               Based upon our examination of the entire record before us,             
          we find that petitioners have failed to carry their burden of               
          proving that they are entitled to deduct the respective rental              
          expenses claimed for 1996 and 1997.                                         
          Claimed Mortgage Interest Deduction                                         
               Respondent determined in the notice to disallow the mortgage           
          interest deduction of $21,846.03 that petitioners claimed in                
          their 1996 joint return with respect to the Doon Way residence.             
          On brief, respondent concedes that petitioners have established             
          that they are entitled for 1996 to a mortgage interest deduction            
          of $17,392.  It is petitioners’ position that they are entitled             
          to deduct the entire $21,846.03 of mortgage interest that they              
          claimed in their 1996 joint return.                                         
               Petitioners attempted to satisfy their burden of proof with            
          respect to the mortgage interest deduction at issue through Ms.             
          Stoddard’s testimony.17  We found her testimony to be general,              

               16In their 1997 Schedule E, petitioners claimed rental                 
          expense deductions for advertising, cleaning and maintenance,               
          insurance, utilities, and depreciation.  At trial, petitioners              
          introduced into the record certain other checks in an attempt to            
          establish that they also paid, but did not deduct in their 1997             
          Schedule E, rental expenses for legal fees, supplies, and automo-           
          bile and travel.  See supra note 14.  On the record before us, we           
          find that petitioners have failed to establish that any of the              
          expenses claimed as a deduction for 1997 would be allowable as a            
          deduction whether or not the Doon Way residence was rented.  See            
          sec. 280A(b), (e)(2).                                                       
               17Petitioners did not make part of the instant record Form             
          1098, Mortgage Interest Statement, for 1996 with respect to the             

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