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more state of the art and cars change based on their
technological opulence * * *
A business associate of petitioner's, Leon Altemose, who had
staged exotic car shows testified:
These highly customized, modified exotic cars have a
limited life and I think it's about a year, typically,
maybe two years and then they start to drop
significantly in value because they are replaced by
something better.
We do not need to determine the precise useful life of the exotic
automobiles. Indeed, petitioner testified that some of the
exotic automobiles might be shown for many years. Nevertheless,
we are convinced that the exotic automobiles, precisely because
of their nature as state-of-the-art, high technology vehicles,
had a useful life as show cars shorter than their ordinary useful
life and, thus, suffered obsolescence. We so find.
Explicit in our finding is a finding that the exotic
automobiles were not museum pieces of indeterminable useful life.
Respondent cites us the U.S. Court of Claims' decision in
Harrah's Club v. United States, 228 Ct. Cl. 650, 661 F.2d 203
(1981). At issue there was the cost of restoring antique
automobiles primarily held for display in connection with the
taxpayer's trade or business. The taxpayer argued that the
restoration costs were depreciable over the period in which the
restoration could be estimated to be useful in the business of
the taxpayer. The U.S. Court of Claims disallowed a depreciation
deduction in part on the basis that: "The evidence establishes
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