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to store soybeans, petitioners are not entitled to depreciation
deductions because they have not established the cost basis in
the storage building.
With respect to depreciation deductions related to the tile
installed on the Ross farm, petitioners claimed $2,000 for each
of the years at issue. Respondent allowed all of the $2,000
depreciation of the tile deducted for 2001 and $1,333 of the
$2,000 deducted for 2002. Respondent disallowed the $667 of the
depreciation of the tile claimed for 2002 and all of the $2,000
deducted for 2003 because the 5-year useful life had expired in
September 2002. Petitioners are not entitled to the claimed
depreciation deductions beyond the useful life of the tile.
Petitioner testified that he paid approximately $129,000 for
the DeMoore farm, approximately $1,375 per acre ($220,000 for 160
acres) for the Sioux Valley farm, and $154,000 for the Ross farm.
He testified that all three properties were 160-acre farms that
he purchased at distress prices from the Federal Farm Credit
Association. Petitioner did not submit copies of the purchase
agreements, deeds, mortgages, canceled checks, or any other
documents to establish the purchase prices of the farms.
Petitioner submitted an undated letter from Dan Pike &
Associates Auction Co. listing farmland and building lots sold by
the company. Petitioner has written “2005” on the letter. The
letter provides no evidence of the value of petitioner’s farmland
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