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computer leasing field and the pertinence of such experience to
determine the potential [of the] transactions for profit.”
Respondent, on the other hand, contends that petitioners
failed to carry their burden of proof under Rule 142(a).
B. Analysis
Petitioners failed to meet their burden of proof on this
issue. Petitioners offered no substantive evidence regarding
Equitec’s computer leasing transactions. Petitioners’ legal
arguments on brief are no substitute for evidence relating to
Equitec’s transactions. For instance, even assuming for the sake
of argument that Kanter’s prior experience in similar investments
may be a relevant factor to be considered in determining whether
Equitec had an actual and honest profit objective, that factor
alone is far from dispositive. See sec. 1.183-2(b), Income Tax
Regs. Consequently, the Court sustains respondent’s
determination on this issue. See Rule 142(a).
Issue XVII. Whether the Kanters Are Entitled to an Investment
Interest Expense Deduction for 1981 (STJ report at
167-168)163
On their 1981 income tax return, the Kanters deducted
$45,095 identified as investment interest expense related to GLS
Associates. Respondent disallowed this deduction in the notice
of deficiency, which stated in pertinent part:
163 The Court’s disposition of this issue represents in
large measure a wholesale adoption of the recommended findings of
fact and conclusions of law set forth in the STJ report.
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