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its farming activity. Pursuant to section 707(a), this type of
transaction is treated as one between the Bitker partnership and
petitioners acting other than in their capacity as partners.
Consequently, payments made to petitioners by the Bitker
partnership for use of the farmland could constitute ordinary and
necessary rental expenses incurred in the conduct of its trade or
business that are deductible under section 162.
Petitioners maintain that the Bitker partnership’s payments of
principal and interest on petitioners’ land mortgages should be
treated as payments of land rent. Petitioners, however, have
offered no evidence, testimonial or otherwise, that (a) the Bitker
partnership made the payments as rent for such use or (b) the
payments represented fair rental value. Moreover, the record is
silent as to the number of acres used by the Bitker partnership.
Simply stated, petitioners have failed to provide any information
or substantiation that would permit us to estimate the allowable
deductions as permitted under Cohan v. Commissioner, 39 F.2d 540,
543-544 (2d Cir. 1930). See Vanicek v. Commissioner, 85 T.C. 731,
742-743 (1985). Since petitioners have failed to provide evidence
on the factual issue as to the amount of rent, if any, paid by the
Bitker partnership for use of the land, section 7491(a) does not
place the burden of proof on respondent with respect to this issue.
Accordingly, in computing petitioners’ tax liabilities, (1)
petitioners’ shares of income from the Bitker partnership will not
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