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IV. U.S. Real Estate
The U.S. real estate has been vacant land throughout the
subject years. During the subject years, an apparently unrelated
entity leased from petitioner approximately 10 acres of the U.S.
real estate for use as a skydiving landing zone. Pursuant to the
lease agreements, the lessee was responsible for maintenance
costs, utilities, license fees, personal property taxes, and
other costs associated with its use of the leased property.
Between March 16, 1993, and April 1, 1996, another apparently
unrelated entity held an option to purchase a portion of the U.S.
real estate.
During the respective subject years, petitioner realized
rental income of $12,000, $18,000, and $12,000 as to the lease
and $36,000, $21,000, and zero dollars as to the option. During
the same respective years, petitioner incurred expenses totaling
$77,059, $62,418, and $40,041 for real property taxes payable to
the County of San Diego, franchise taxes payable to the State of
California, and other fees.
V. Petitioner’s Tax Returns Other Than the Initial Return
On July 23, 1999, petitioner filed with the Philadelphia
Service Center a Form 1120-F for its taxable year ended May 31,
1993 (1993 taxable year). Also on that date, petitioner
voluntarily (before any contact from respondent) filed with the
Philadelphia Service Center a Form 1120-F for each of the subject
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