-3-
increased deduction for depreciation in the amount of $11,382 and
increased income from gain on disposition of an asset of $4,649.2
Therefore, petitioner asserts, the $87,519 reported as
petitioner's share of income from the trust on the "1041
Supplement" should be reduced by $6,733 ($11,382 increase in
depreciation deduction less $4,649 increase in income from gain
on disposition of asset) to $80,786.
Respondent's determinations are presumed correct, and
petitioner bears the burden of proving otherwise. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). Moreover,
deductions are a matter of legislative grace, and petitioner
bears the burden of proving that he is entitled to any deduction
claimed. Rule 142(a); New Colonial Ice Co. v. Helvering, 292
U.S. 435, 440 (1934); Welch v. Helvering, supra at 115.
The parties agree that the trust involved here is a so-
called grantor trust subject to the provisions of subpart E, part
I, of subchapter J. When the grantor (in this case, petitioner)
is treated as the owner of any portion of a trust, the grantor's
taxable income and credits include those items of the trust's
income, deductions, and credits attributable to the portion of
the trust that the grantor is treated as owning. Sec. 671. An
item of income, deduction, or credit included in computing a
2Petitioner does not explain the increase in income from the
gain on disposition of the asset but, apparently, it is related
to the change in the depreciation deduction.
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