Bruce Selig and Elaine Selig - Page 12

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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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