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Board and Room Rental
Petitioner’s mobile home has three bedrooms. He also
converted an attached heated porch into a bedroom. Petitioner
allowed to stay with him individuals who were friends of his son
or daughter or who had previously stayed with him. Some were
minors. Sometimes as many as seven people lived with him,
including his son and daughter. There were sometimes two or
three persons to a bed. His guests were people “who had been in
some sort of misfortune or down and out with nowhere to go.” As
it turned out, many of petitioner’s guests were using drugs.
They did not, with a few exceptions, pay any rent or do any work
to compensate petitioner for their room and board.
Petitioner, on his Schedule C for board and room rental,
checked the box for “other” method of accounting and wrote in
“rent accrued”. Under petitioner’s “rent accrued” method, he
kept a running total of the amounts that he thought should have
been paid by each individual. In the case of Stacy Brown,
petitioner shows an “accrual” of $7,293.16 for 1994, but it
includes unpaid amounts from 1992 and 1993. The “accruals” do
not reflect amounts that may have been paid by work or cash
during the respective years. For 1994 and 1997, petitioner
claimed bad debt deductions for unpaid rent. Petitioner used a
method other than the accrual method for his expenses.
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Last modified: November 10, 2007