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partnership expense (i.e., $24,052 as a salary expense in 2003),
respondent no longer contests the amount of losses reported by the
Tripp partnership for any of the years in issue. However,
respondent posits that petitioner is not entitled to deduct her
distributive share of those losses, maintaining that she lacks a
sufficient basis in the partnership to do so.
As stated above, respondent contests a $24,052 salary expense
that the Tripp partnership deducted in 2003. That expense
represents the value of property (cash and used beauty salon
equipment) transferred to a cosmetologist who had rendered
services to the Tripp partnership. Respondent does not dispute
that cash and equipment were transferred to the cosmetologist in
exchange for services rendered to the Tripp partnership but rather
contests the value claimed for the property transferred.
Moreover, respondent contends that Mr. Tripp, rather than the
Tripp partnership, was the owner of the property before the
transfer.
Discussion
Rule 142(a)(1) provides that the burden of proof is on
respondent with respect to any new matter. Respondent concedes
that the issue as to whether petitioner had a sufficient basis in
her interest in the Tripp partnership to use the partnership
4(...continued)
ceased operating, because of storage expenses for its equipment.
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Last modified: November 10, 2007