T.C. Memo. 1995-521
UNITED STATES TAX COURT
BRUCE SELIG AND ELAINE SELIG, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19151-93. Filed October 31, 1995.
P exhibited "exotic automobiles", state-of-the-
art, high technology vehicles with unique design
features or equipment, for a fee. Ps claimed
depreciation deductions for such automobiles. P's
wholly owned S corporation made expenditures related to
P's plans to open an exotic car entertainment complex.
1. Held: The exotic automobiles were subject to
obsolescence and, thus, were depreciable under secs.
167 and 168, I.R.C.
2. Held, further, the expenditures made by P's
wholly owned S corporation are nondeductible under sec.
162(a), I.R.C., on account of being preopening expenses
not incurred in a trade or business of the corporation.
3. Held, further, the sec. 6661, I.R.C.,
additions to tax and sec. 6662, I.R.C., penalties
determined by respondent are, in part, sustained.
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