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income from the calculation of passive loss for a sec.
469, I.R.C. activity, despite the proper grouping of
such income with an item of passive loss against which
such income would otherwise be offset.
Murray H. Falk, for petitioners.
Paul L. Dixon, for respondent.
OPINION
WELLS, Judge: Respondent determined deficiencies in
petitioners’ Federal income taxes for 1999 and 2000 as follows:1
Year Deficiency
1999 $17,011
2000 114,443
1Although respondent initially determined corresponding
deficiencies of $17,011 and $16,384 for 1999 and 2000,
respectively, the parties have stipulated that the deficiency
determined by respondent for 2000 is $14,443.
The issue to be decided is whether losses from petitioners’
rental activity constitute passive activity losses pursuant to
section 469.2
1Although respondent initially determined sec. 6662(a)
accuracy-related penalties of $3,402.20 for 1999 and $3,276.80
for 2000, respondent concedes that penalties are inapplicable.
2All section references are to the Internal Revenue Code, as
amended, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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