Tax Court in Brief | Sezonov v. Commisioner | Side Gigs and Passive Activities

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The Tax Court in Brief – April 18th- April 22nd, 2022

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Tax Litigation:  The Week of April 18th, 2022, through April 22nd, 2022

Sezonov. Comm’r, TC Memo. 2022-40 | April 20, 2022 | Marvel, J. | Dkt. No. 26650-17

Short Summary: The Sezonovs (“Petitioners”) had their primary residence in Ohio during 2013 and 2014. Mr. Sezonov was the only member of a single-member LLC. Petitioners owned two properties that they rented out through the LLC during those years (the “Rental Properties”). Petitioners performed various activities with regard to the Rental Properties, including communicating with prospective renters and preparing the properties for new renters.

Petitioners kept records of the hours they worked on the Rental Properties for these years:

Mrs. Sezonov Mr. Sezonov
2013 2014 2013 2014
Hours 476:20 80:20 405:30 26:40





Petitioners jointly filed their 2013 and 2014 Forms 1040, U.S. Federal Income Tax Returns, reporting the income, expenses, and losses associated with the Rental Properties on Schedule E, Supplemental Income and Loss. The IRS issued a statutory notice of deficiency disallowing the loss deduction that Petitioners claimed on their Schedules E for 2013 and 2014.

Key Issues

Primary Holdings

Key Points of Law

Insights:  This case is another illustration of the (frustrating) principle that deductions can be hard to come by—taxpayers need to be able to prove them up in order to get them.

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