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amount of $19,795.2 Attached to petitioner's 1991 return was a
report (Hetz report) that contains what purports to be the signa-
ture of Russell W. Hetz (Mr. Hetz).3 The Hetz report indicated
that, based on the cost approach, "We recommend a Rounded Es-
timate [sic] Fair Market Value" for "the MARK IV United States
Navy Helmet, Circa 1959" of $76,700.4
2 Petitioner calculated the amount of the deduction reported in
his 1991 return on the basis of the claimed fair market value of
the Mark IV helmet at issue, reduced to take account of the
limitation prescribed in sec. 170(b)(1)(A) that the deduction not
exceed 50 percent of his contribution base for 1991.
3 Mr. Hetz' purported resume states, inter alia, that he is "a
Fee Appraiser, specializing in the market valuation of industrial
machinery and transportation equipment."
4 The Hetz report noted, inter alia, that the various factors to
be considered in determining that value included the "Sale of [a]
similar Helmet." That report further stated, with no explana-
tion: "WE have elected to use the Cost Approach." It described
the cost approach as an estimate of "value based on the current
cost in dollars of a new replacement Property Unit of similar
design, capacity, materials and utility." The Hetz report
concluded that the total design and material cost of "the MARK IV
Pressure Helmet" as of the time the Hetz report was prepared was
$338,000. It then allocated that cost to the Mark IV helmet that
was the subject of the Hetz report as follows:
In order to spread the development costs for High Technol-
ogy Projects such as this MARK IV Helmet, the first 2 units
produced are tested to their limits, usually to destruc-
tion. We say the subject Helmet was the first one built
after the tests and we shall spread the Design and Material
Cost over the First Three Units.
3 $338,000 = $112,933 [sic] Allocated Cost for the Subject Helmet.
The Hetz report adjusted that $112,933 allocated cost for depreciation using a
100-year useful life for the helmet that was the subject of that report and
arrived at a recommended "Rounded Estimate [sic] Fair Market Value" of $76,700
for that helmet.
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