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Property A was paid to clean out the basement of that property in
anticipation of their move.
Our examination of the record convinces us that petitioners
failed to maintain any records whatsoever with respect to the
items claimed on the Schedule E attached to their 2002 return.
Moreover, Mrs. Burkley and their tax preparer, Mr. Ingram, admit
that some of the figures claimed for deductions taken on their
2002 return, including all of their Schedule E deductions, were
false and/or arbitrarily contrived. Accordingly, without any
evidence to the contrary, we sustain respondent’s determination
and hold that respondent has met the burden of proof with respect
to the issues relevant to petitioners’ 2002 Schedule E as raised
in the answer.
Schedule A Deductions
Petitioners maintain that they are entitled to deduct
$73,353 in Schedule A expenses for taxable year 2002. Respondent
disallowed $24,788 of petitioners’ claimed Schedule A expenses in
the notice of deficiency and further challenged $48,565 of
claimed expenses in the answer. We sustain respondent’s
determination with respect to the disallowance in the notice of
deficiency and hold that respondent has met the burden of proof
with respect to the remaining amount, after concessions, as
asserted in the answer, and based on the facts hereinafter
discussed.
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Last modified: March 27, 2008