Raymond J. and Ilene H. Pavelko - Page 8

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          to petitioner wife’s father, who lived on the land and farmed it.           
          Petitioner further testified that his father-in-law did not pay             
          rent, instead paying taxes in exchange for the right to occupy              
          the land.  Petitioner stated that the car and truck expenses                
          which were listed on the Schedule C for this activity were put              
          there in error, and that the expenses should have been listed on            
          the mental health services Schedule C instead.  Petitioners did             
          not explain the only other expense on this Schedule C, the                  
          mortgage expense, nor did they explain how this activity could              
          have been operated for a profit when the lessee was not required            
          to pay rent.  Petitioners produced no evidence supporting a                 
          finding of a profit objective in this activity with respect to              
          the above-mentioned factors.  We therefore find that petitioners            
          have not met their burden of proving respondent’s determinations            
          to be in error, see Rule 142(a),3 and we sustain respondent’s               
          determination with respect to the rental activity.                          
               We now turn to the remaining two activities, both of which             
          are related to the mental health field.  Petitioners’ testimony             
          and arguments concerning these activities can be summarized as              
          follows:  During each of the years in issue, petitioner was                 
          involved in an activity in which he sold videotapes related to              

          3Sec. 7491(a) does not shift the burden of proof to                         
          respondent in this case because petitioners have provided no                
          credible evidence supporting a profit objective with respect to             
          the rental activity.  Sec. 7491(a)(1).                                      

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