John K. Johnsen Frances Johnsen, Cross-Appellants v. Commissioner of Internal Revenue, Cross-Appellee

MILBURN, Circuit Judge.

John K. Johnsen (“taxpayer”) and Frances Johnsen instituted this action in the United States Tax Court to challenge a determination by the Commissioner of Internal Revenue (“the Commissioner”) that they owe additional taxes of $3,700.00 for the year 1976. 1 The issue before the Tax Court was the deductibility of taxpayer’s distributive share of pre-opening expenses incurred in 1976 by a limited partnership formed for the purpose of constructing and operating an apartment complex.

The Tax Court determined that the limited partnership was not engaged in the active conduct…