George J. Emershaw and Virginia D. Emershaw v. Commissioner of Internal Revenue

BOGGS, Circuit Judge.

George J. and Virginia D. Emershaw (the Emershaws), husband and wife, are partners in Leasing Equipment Associates-83 (LEA), a limited partnership organized for the purpose of purchasing and leasing computers and peripheral equipment. In 1983 and 1984, LEA suffered losses in the approximate amounts of $445,000 and $792,-000, respectively. The Emershaws reported $37,801 and $66,654 as their distributive share of these losses on their 1983 and 1984 tax returns. The Commissioner of Internal Revenue disallowed the deductions and sent the Emershaws a statutory notice of…