Patricia A. Hendricks and John J. Hendricks - Page 18

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               Mr. Hendricks and Mr. Angeli testified at trial that the               
          risks associated with the substantial farming enterprise with               
          which Mr. Hendricks was engaged at the time were what motivated             
          the transfer of the remaining condominiums.  Petitioner was not             
          involved in the farming enterprise, and the Hendrickses wanted to           
          protect their investment in the remaining condominiums because              
          they constituted the Hendrickses’ only financial resource for               
          their retirement outside of Social Security.  Furthermore,                  
          despite the lack of success with the farming enterprise, Mr.                
          Hendricks paid all of his debts from the farming enterprise.                
               There is nothing in the record to indicate that the                    
          Hendrickses’ standard of living increased in comparison to their            
          standard of living in prior years.  Their lifestyle was not                 
          lavish, and they made no unusual expenditures.  We find that                
          petitioner did not significantly benefit from the deduction                 
          attributable to Mr. Hendricks’s investment in Boulder Oil and               
          Gas.  See Hayman v. Commissioner, supra; Jonson v. Commissioner,            
          118 T.C. 106 (2002), affd. 353 F.3d 1181 (10th Cir. 2003).                  
               As retirees, the Hendrickses rely on the Social Security               
          checks they receive monthly and depend upon the rents from the              
          remaining condominiums for income.  Their current monthly living            
          expenses exceed their income by about $1,100.  They are able to             
          meet their living expenses only through financial assistance from           
          their children.  We conclude that petitioner would experience               

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