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spent for personal purposes. Sutter v. Commissioner, 21 T.C.
170, 173 (1953). Petitioners did not produce any bills, canceled
checks, or testimony to substantiate any portion of the expenses
that relates to Mr. Schmidt’s separate farming business. Thus,
petitioners have failed to establish that the Schmidts are
entitled to a deduction for any portion of the expenses under
section 162.8
4. Rental Value of Residence
The Schmidts leased the Schmidt farm, including the
farmhouse, from Hillside Dairy for $6,000. We are satisfied, on
the basis of the property taxes for the farmhouse, that the fair
rental value of the farmhouse for each year at issue did not
exceed $6,000.
5. Summary of Adjustments to the Schmidts’ Income
The following personal expenses paid by Hillside Dairy are
included in the Schmidts’ income as constructive dividends for
the years at issue:
8Except as otherwise provided, an individual is not allowed
a deduction with respect to the use of a dwelling unit that is
used by the individual as a residence. Sec. 280A(a). The
individual, however, may deduct expenses allocable to portions of
the dwelling that are exclusively used for business purposes.
Sec. 280A(c). In the cases at bar, the Schmidts did not argue
that the utility expenses are deductible under sec. 280A.
Therefore, we do not address the question of whether any portion
of the utility expenses may be deductible under that section. We
note, however, that the Schmidts made no showing that the
farmhouse, or any portion thereof, was used exclusively for
business purposes.
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