Schedule E Rental Expenses for 1994.
Petitioner documented taxes of $2,526 on the New Jersey
house, which respondent allowed as a rental expense deduction on
depreciation, repairs, and other expenses disallowed for 1994 as
deductions on property management Schedule C were deductible in
1994 on Schedule E as expenses related to the rental of the New
or business expenses deductible on Schedules C for the business
dealing in real estate, petitioner does not challenge these
dealers in real estate, and, therefore, we sustain respondent on
VII. Self-Employment Tax and Net Operating Loss Carryovers
Respondent determined that petitioner was liable for self-
employment tax of $5,902 in 1994, $3,102 in 1995, and $3,626 in
1996 on the net profit from his consulting business and allowed
petitioner a deduction for half of those taxes ($2,951 in 1994,
$1,551 in 1995, and $1,813 in 1996).
Respondent also allowed petitioner a net operating loss
carryover of $18,520 to 1994 from the examination of earlier
years but, on the basis of the adjustments made to 1995,
disallowed the net operating loss carryover of $36,389 petitioner
claimed on the 1996 return.