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deductions for partner expenses claimed on their returns. The
Bensons conceded the issue for the years 1989, 1990, and 1993,
but not for 1994. The Bensons failed to substantiate any item of
expense. Accordingly, we sustain respondent’s determination as
to 1994.
4. Rental Income/Loss--Residential Rental Expenses:
Respondent determined that the Bensons were not entitled to
unsubstantiated residential rental expenses of $23,599, $22,951,
$28,621, $23,737, and $23,599 for 1988, 1989, 1990, 1993, and
1994, respectively. The deductions were claimed by NPI and
passed through to its shareholders. The Bensons did not provide
the Court with evidence to substantiate the deductions claimed.
Accordingly, we sustain respondent’s determination on this issue.
5. Passive Loss Limitation
Respondent determined that rental losses reported on Eric’s,
Brad’s, and Mark’s returns are subject to the passive loss
limitations contained in section 469. Petitioners offer no
evidence with which we can find that they fall within the
auspices of any of the exceptions articulated in the
regulations.68 See Kessler v. Commissioner, T.C. Memo. 2003-185;
sec. 1.469-1T(e)(3)(ii)(A) through (F), Temporary Income Tax
Regs., 53 Fed. Reg. 5702 (Feb. 25, 1988). Without a finding that
68On brief, petitioners state: “Petitioners do not dispute
respondent’s argument on the applicable Subchapter S rules at
page 136-38 of his brief.”
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