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Tschetter v. Commissioner, T.C. Memo. 2003-326; sec. 1.183-
1(d)(3), Example (ii), Income Tax Regs. Respondent does not
dispute that petitioner paid real property taxes for lot Nos.
128A and 129 in 2002. The Court holds that petitioner is not
entitled to claim a deduction for real property taxes paid in
2002 on Schedule E, but she is entitled to claim a deduction for
such taxes on Schedule A, Itemized Deductions.
Lot No. 126
Petitioner contends that she is entitled to deduct expenses
and depreciation for the cottage on lot No. 126, asserting that
she intended to profit on the property by renting the cottage to
local citizens and visiting scientists. Respondent disagrees,
asserting that petitioner is not entitled to any deductions
claimed under Schedule E in excess of $500.3 Respondent
determined that petitioner did not hold the property with a
profit objective.
The Court has reviewed the evidence presented by petitioner
and respondent and concludes that petitioner has not sufficiently
shown that she held the property with the objective to derive a
profit from the cottage during 2002.
Petitioner did not carry on the activity in a businesslike
manner. Although petitioner claims to have had an interest in
3Respondent has allowed a deduction of $500 under sec.
183(b)(2), which represents the gross income attributable to the
activity.
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