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5401-9 S. 5415 S.
Broadway Prop. Broadway Prop.
Mortgage int. –- $7,015
Gardening $475 --
Depreciation 19,652 1,844
20,127 8,859
Net loss (20,127) (8,859)
Applying the passive activity loss limitation of section 469,
petitioners for 1992 deducted $25,000 in total Schedule E losses
from the 5401-9 S. Broadway property and the 5415 S. Broadway
property.
On Schedule E to their 1993 return, petitioners reported
the following rental income, expenses, and net losses from the
5401-9 S. Broadway property and the 5415 S. Broadway property:
5401-9 S. 5415 S.
Broadway Prop. Broadway Prop.
Rental Income 1$18,000 --
Expenses:
Mortgage int. –- $1,000
Legal and pro-
fessional fees 118,000 -–
Taxes –- 1,159
Depreciation 19,652 1,844
37,652 4,003
Net loss (19,652) (4,003)
1The rental income of $18,000 and corresponding $18,000 of
legal and professional fees expense that petitioners reported for
1993 from the 5401-9 S. Broadway property were attributable to
the previously described arrangement between petitioner and an
attorney whereby the attorney received office space on the
building’s first floor in exchange for her providing legal
services to petitioner.
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