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4. Rental Value of Residence
Mr. Tschetter leased the homestead, including the farmhouse,
from Wolf Creek Farm. Wolf Creek Farm received rent in the form
of 30 percent of the calf crop and 40 percent of the other crops
produced on the farm. Mr. Tschetter included only his 70/60
percent of the crop revenues in his income. He excluded the
entire 30/40 percent paid to Wolf Creek Farm as rent, including
the portion attributable to the farmhouse. In effect, he
deducted the portion of the rent paid for the farmhouse. The
rent of the farmhouse is his personal expense and is not
deductible. See sec. 262.
The farm lease does not specify that portion of the rent to
be paid for use of the farmhouse. Nor has Mr. Tschetter provided
any evidence to show that portion of the rent properly
attributable to the farmhouse.
The amount of the constructive dividends respondent
determined in the Tschetter notice of deficiency exceeds the
amount of the deductions disallowed in the Wolf Creek Farm notice
of deficiency. The record does not explain that excess.
4(...continued)
the dwelling that are exclusively used for business purposes.
Sec. 280A(c). Mr. Tschetter did not argue that the utilities
expenses are deductible under sec. 280A. Therefore, we do not
address the question of whether the utilities expenses may be
deductible under that section. We note, however, that Mr.
Tschetter made no showing that the farmhouse, or any portion
thereof, was used exclusively for business purposes.
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