- 6 - Section 167 provides, in part, for a depreciation deduction with respect to property used in a trade or business. Depreciation allows the taxpayer to recover the cost of the property used in a trade or business or for the production of income. United States v. Ludey, 274 U.S. 295, 300-301 (1927); Southeastern Bldg. Corp. v. Commissioner, 3 T.C. 381, 384 (1944), affd. 148 F.2d 879 (5th Cir. 1945). To substantiate entitlement to a depreciation deduction, the taxpayer must show that the property was used in a trade or business (or other profit-seeking activity). In addition, the taxpayer must establish the property's depreciable basis. E.g., Delsanter v. Commissioner, 28 T.C. 845, 863 (1957), affd. 267 F.2d 39 (6th Cir. 1959); Kerrigan v. Commissioner, T.C. Memo. 1995-483; Greenway v. Commissioner, T.C. Memo. 1980-97. Petitioner has failed to substantiate any depreciable basis for the office equipment. According to petitioner's testimony, he obtained a loan in the amount of $10,000, which he used to purchase various pieces of office equipment in 1988 or 1989. However, petitioner has failed to present detailed testimony, the loan agreement, or any other documentation such as receipts, invoices, or canceled checks to substantiate the cost of such equipment. Thus, petitioner has failed to substantiate any depreciable basis for the equipment. Moreover, petitioner has failed to substantiate the extent to which the office equipmentPage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011