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Respondent's determinations in the statutory notice of
deficiency are presumed to be correct, and petitioners bear the
burden of proving otherwise. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). Moreover, deductions are strictly a
matter of legislative grace, and petitioners bear the burden of
proving their entitlement to any deductions claimed. Rule
142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992);
New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Office Expenses - Computer
Petitioner claimed a deduction for office expenses in the
amount of $3,340 on his Schedule C. Respondent disallowed $2,450
of the claimed deduction. The parties agree that the claimed and
disallowed office expenses include an amount claimed for the
purchase of a computer.
Petitioner purchased an Apple Macintosh computer on May 15,
1992 for $2,013 (not including Minnesota sales tax of 6.5
percent). He purchased the computer through petitioner wife's
employer because of the discounts offered by Apple to employees
of educational institutions.
Respondent's position is that the cost of the computer is
generally not deductible because it is subject to the section 168
depreciation rules. We agree. Respondent further argues that
petitioner failed to make a proper section 179 election which is
required for the computer to be treated as a currently deductible
expense. Petitioner contends that it is unfair to hold that a
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