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the trade or business or of property held by the taxpayer for the
production of income shall be allowed as a depreciation
deduction.1
Generally, section 168(a) provides that the depreciation
deduction provided by section 167(a) for any tangible property
shall be determined by using certain applicable methods, periods,
and conventions.2
Exotic automobiles are state-of-the-art, high technology
vehicles with unique design features or equipment. Petitioner
owned exotic automobiles that, during 1987 through 1990, he
exhibited for a fee. The fees earned by petitioner for such
1 Sec. 167(a) provides as follows:
General Rule.--There shall be allowed as a depreciation
deduction a reasonable allowance for the exhaustion,
wear and tear (including a reasonable allowance for
obsolescence)--
(1) of property used in the trade or business, or
(2) of property held for the production of
income.
2 Sec. 168(a) provides as follows:
Accelerated Cost Recovery System
General Rule.--Except as otherwise provided in this
section, the depreciation deduction provided by section
167(a) for any tangible property shall be determined by
using--
(1) the applicable depreciation method,
(2) the applicable recovery period,
(3) the applicable convention.
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Last modified: May 25, 2011