Haralampos Katerelos and Irene Katerelos - Page 59

                                                 - 59 -                                                   

            "qualified investment" means with respect to any taxable year the                             
            aggregate of the applicable percentage of the basis of each new                               
            section 38 property, as defined in section 48(b), placed in serv-                             
            ice by the taxpayer during such year plus the applicable percent-                             
            age of the cost of each used section 38 property, as defined in                               
            section 48(c)(1), placed in service by the taxpayer during such                               
            year.  Section 38 property is defined to include "tangible per-                               
            sonal property (other than an air conditioning or heating unit)".                             
            Sec. 48(a)(1)(A).  The term "section 38 property" "includes only                              
            recovery property (within the meaning of section 168 * * *) and                               
            any other property with respect to which depreciation * * * is                                
            allowable and having a useful life * * * of 3 years or more."                                 
            Sec. 48(a).  Petitioners have not established that (1) they                                   
            placed section 38 property in service during 1986 or (2) either                               
            (a) their basis in new section 38 property or (b) the cost of                                 
            used section 38 property.45                                                                   
                  In addition, section 49(a) disallows the regular percentage                             
            of the qualified investment determined under section 46(c) for                                
            property placed in service after December 31, 1985.  Section                                  
            49(b)(1) provides an exception to that disallowance for transi-                               



            45  Although it is possible that certain of the properties that                               
            the parties stipulated had minimum bases of $22,102 and that                                  
            petitioners placed in service during 1986 do, in fact, fit within                             
            the definition of sec. 38 property, the record before us does not                             
            permit us to make such a determination.  For example, petitioners                             
            have not even established what properties are covered by that                                 
            stipulation, let alone whether such properties, whatever they                                 
            are, constitute sec. 38 property.                                                             


Page:  Previous  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  61  Next

Last modified: May 25, 2011