- 5 - to business property and the loss on the sale was a business loss. Mr. Strand prepared petitioner’s 1994 return. Petitioners relied on Mr. Strand’s tax advice in the preparation of their 1994 return. Petitioners reported the $499.98 they received on the sale of the Belair property, for 1-week’s early occupancy, on Schedule E, Supplemental Income and Loss, of their 1994 return as rental income from the Belair property. Petitioners also reported a $35,428 loss on the sale of the Belair property on Form 4797, Sales of Business Property, which they attached to their 1994 return. Petitioners filed their 1994 joint Federal income tax return on December 8, 1997. Discussion I. Loss on Sale of the Belair Property Deductions are a matter of legislative grace, and petitioners have the burden of showing that they are entitled to any deduction claimed. Rule 142(a); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).5 Section 165(c) limits the deduction for losses pursuant to section 165(a) by individuals to: (1) losses incurred in a trade or business; 5 Cf. sec. 7491(a), effective for court proceedings arising in connection with examinations commencing after July 22, 1998. Petitioners do not contend that their examination began after July 22, 1998, or that sec. 7491(a) is applicable to their case.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011