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6662(a).1 After concessions,2 there are two issues for decision:
(1) Whether petitioners are entitled to deductions under section
162(a) for expenses relating to a real estate activity, and (2)
whether petitioners are liable for an addition to tax under
section 6651(a)(1) for failure to file their 2002 return timely.
Background
At the time the petition was filed, Mila Alemasov
(petitioner) and Victor Popov were married and resided in San
Francisco, California.3
Petitioner was born in Russia, immigrated to the United
States when she was a child, and has resided in San Francisco
since 1979. She has a bachelor’s degree in international
business from San Francisco State University and a master’s
1Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the year at issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
2In the notice of deficiency, respondent determined that
petitioners had rental income of $3,876 not reported on Schedule
E, Supplemental Income and Loss. At trial, respondent conceded
$3,692 of this adjustment. Respondent conceded the remaining
$184 of the adjustment in his brief to the Court. These
concessions prompted respondent to further concede that
petitioners were not liable for the sec. 6662(a) accuracy-related
penalty since that adjustment was based on the conceded
unreported rental income.
3The parties did not submit an agreed stipulation of facts
at trial as required by Rule 91(a); yet, of the 17 exhibits
accepted into evidence during the trial, 16 were filed as joint
exhibits. Counsel for the parties are experienced attorneys
before this Court, and such practices are not in accord with the
spirit of this Court’s Rules of Practice and Procedure.
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Last modified: November 10, 2007