Maschmeyer's Nursery Inc. - Page 6

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          Depreciation Deductions                                                     
               A house is located on petitioner’s property.  The                      
          Maschmeyers moved into this house in 1977 to replace the previous           
          tenant, who had lived there since about 1965 while employed as              
          petitioner’s foreman.  Maschmeyer continued to occupy the house             
          throughout the years at issue.  For the convenience of his wife             
          and children, however, in 1989 he purchased a home in                       
          Indianapolis, where his wife and children lived during the week.            
          Maschmeyer assumed the foreman’s duties, securing the premises              
          and equipment, overseeing the gang of migrant workers housed in             
          mobile homes on the premises, and supervising pickup of trees               
          outside business hours during harvest seasons.                              
               After Maschmeyer became sole shareholder, petitioner made              
          certain improvements to the house that Maschmeyer occupied.  In             
          1986 a swimming pool was installed at a cost of $35,011.  In 1987           
          a pool house and other amenities were added to the house at a               
          cost of $32,684.  In 1988 and 1989 improvements were made to the            
          garage and a master bedroom was added to the house at a cost of             
          $94,295.  Additional redecorating and wallpapering were done at a           
          cost of $4,482 in 1990.  Petitioner claimed depreciation                    
          deductions for the aforesaid improvements in 1989, 1990, and 1991           
          in the amounts of $4,212, $5,038, and $5,038, respectively.                 
          Respondent disallowed these deductions in her notice of                     
          deficiency.                                                                 







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