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Year Amount of Depreciation Deducted
1983 $3,277
1984 3,072
1985 2,880
Respondent determined that the appropriate conversion rate
from German deutschemarks to dollars at the time of the purchase
was 2.13 deutschemarks to the dollar. She further determined
that the useful life of the condominium was 25 years rather than
20, and that current depreciation deductions should be computed
by using the straight-line method of depreciation. As a result,
respondent reduced the depreciation deduction for each year as
follows:
Year Amount
1983 $1,743
1984 1,538
1985 1,346
The average conversion rate from deutschemarks to dollars during
1981 was 2.25 deutschemarks to the dollar.6
State Income Tax Refunds
Petitioners received refunds of state income taxes as
follows:
Year Amount of Refund
1984 $1,538
1985 1,346
Petitioners did not include the refunds in income. Respondent
increased petitioners' income for each year by the amount of the
6Statistical Abstract of the United States 887 (104th ed.
1984). See Fed. R. Evid. 201.
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