- 56 -
A These properties were basically rental prop-
erties. As long as the rent was paid, I felt that they
were valid rental properties.
Q Could the corporation therefore deduct oper-
ating expenses?
A That’s correct.
Q Of the rental properties?
A Yes, sir.
Mr. Braun’s characterization in his testimony of the Caro-
line County farm and the Virginia Beach property as “basically
rental properties” must have been based on information provided
to him. We presume that petitioners provided such information to
Mr. Braun. We have found that petitioners have failed to carry
their burden of establishing that during the years in question
the Caroline County farm and the Virginia Beach property were
rental properties that Delaware Corporation owned. See supra
note 19. On the record before us, we find that petitioners have
failed to carry their burden of establishing that they were
correct in informing Mr. Braun that during the years at issue the
Caroline County farm and the Virginia Beach property were rental
properties that Delaware Corporation owned.
On the record before us, we find that petitioners have
failed to carry their burden of establishing that they supplied
correct information to Mr. Braun and to the respective preparers
of the returns in question and that the errors in each of those
returns were the results of errors on the part of Mr. Braun and
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