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Petitioner allocated $1,400 of the total travel expenses to
Schedule E and the remainder to Schedule F. He allocated and
deducted travel expenses on Schedule E for his rental and
Schedule F for his farming activity as follows:
Item 2001 2002 2003
Travel:
Transportation $5,175 $5,475 $5,400
Meals & lodging 3,600 3,600 3,600
Total travel 8,775 9,075 9,000
Schedule E rental allocation 1,400 1,400 1,400
Schedule F farming allocation 7,375 7,675 7,600
Discussion
Respondent disallowed all travel expenses petitioners
deducted on Schedules E and F and most of the depreciation
petitioners deducted on Schedules F for 2001, 2002, and 2003.
Petitioners bear the burden of proving that respondent’s
determinations in the notice of deficiency are erroneous.6 See
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Deductions are a matter of legislative grace, and petitioners
bear the burden of proving they are entitled to the deductions
they claimed. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84
(1992).
6Petitioners do not claim that the burden of proof shifts to
respondent under sec. 7491(a). In any event, petitioners have
failed to establish that they satisfy the requirements of sec.
7491(a)(2). On the record before us, we find that the burden of
proof does not shift to respondent under sec. 7491(a).
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