Meinhardt v. Comr., T.C. Memo. 2013-85

(petitioner, an architect, purchased farmland and associated farmhouse in 1976 and rented out the land separate from the farmhouse; attempts to rent the farmhouse were unfruitful and farmhouse never rented for cash; various family members lived in the farmhouse over the years in exchange for improvements made to farmhouse; petitioner claimed deductions associated with the farmhouse which IRS denied; issue before court was whether deductions allowable under either I.R.C. Secs. 212 or 162; petitioners failed to present evidence that they incurred claimed expenses; no deductions allowed under Sec. 162 because petitioner failed to establish existence of real estate rental business; no deduction allowed under Sec. 212 because petitioner failed to establish that farmhouse held for production of income; no evidence that value of services for improvements to farmhouse approximated fair rental value; potential application of I.R.C. Sec. 280A not in issue; accuracy-related penalty not imposed).