- 15 -
Applying the passive activity loss limitation of section 469,
petitioners for 1993 deducted total Schedule E losses of $25,000,
consisting of (1) their total net losses of $23,655 for that year
from the 5401-9 S. Broadway and the 5415 S. Broadway properties
and (2) $1,345 of unallowed prior year passive losses.
The 1992 and 1993 depreciation expenses petitioners claimed
were computed as follows:
Annual
Date Cost/ Deprec. Life deprec.
Rental Prop. acquired basis basis Method (yrs.) expense
5401-9 S. Broadway--
Building 10/1/80 $87,000 $87,000 S/L 20 $4,350
Land 10/1/80 75,000 75,000 -- -- –
Improvement 6/1/87 70,250 70,250 S/L 31.5 2,230
(MM)
Improvement 6/1/90 411,723 411,723 S/L 31.5 13,072
(MM)
5415 S. Broadway 3/15/86 34,800 34,800 S/L 19 1,844
In computing petitioners’ depreciation expenses for 1992 and 1993
with respect to the 5401-9 S. Broadway property building and
improvements, Mr. Collins concluded that petitioners had used the
entire building in a trade or business or had held the entire
building for the production of income.
Net Operating Loss Deductions
On their 1992 and 1993 returns, petitioners deducted net
operating losses (NOL) in the respective amounts of $92,611 and
$57,518 that were carried forward from 1990 and 1991.
The 1990 NOL carryover arose from a net loss of $132,121
petitioners had claimed on Schedule C to their 1990 return. On
their 1990 Schedule C, petitioners reported no income and
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011