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income. Sec. 469(a), (b), (d). If, however, a taxpayer sells
his entire interest in a passive activity, an excess loss
relating to the activity for the year the sale occurred
(including suspended losses relating to the activity carried
forward into the year of the sale) over the total income for the
current year from all passive activities is treated as a loss
from a nonpassive activity and is not subject to the above
limitation of section 469(a). Sec. 469(g).
Other than the claims made on his 1992 through 1996 Federal
income tax returns, petitioner has not offered any evidence to
substantiate that he incurred disallowed passive activity losses
in 1992 through 1996 in relation to the Peach Tree Property. As
discussed previously, claims made on petitioner’s tax returns do
not substantiate the items in issue. Petitioner is not entitled
to deduct in 1997 the claimed $35,289 in suspended passive
activity losses relating to the Peach Tree Property.
Belmont Gardens Legal Fees -- $40,466
Petitioner has not substantiated that he paid $40,466 in
legal fees in relation to the construction of Belmont Gardens.
Petitioner introduced into evidence certain checks made to three
different law firms; however, these checks totaled only $9,500.
At trial, petitioner did not call to testify the attorneys who
allegedly represented him in the Belmont Gardens litigation,
notwithstanding the Court’s suggestion to do so. See Wichita
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