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equipment cost, or when it was placed in service.5 In order to
support a deduction for depreciation, a taxpayer must establish a
property's depreciable basis by showing the cost of property, its
useful life or recovery period, and the previously allowable
depreciation. E.g., Delsanter v. Commissioner, 28 T.C. 845, 863
(1957), affd. in part, revd. in part, and remanded per curiam 267
F.2d 39 (6th Cir. 1959). We hold that petitioners have not
substantiated their depreciation deductions.
Petitioners leased $38,180 of equipment from Tilden
Financial Corp. Petitioners rely on a schedule of lease payments
entered into evidence to show they paid $14,445 in 1986 and
$11,170 in 1987.6 Petitioners rely on what appears to be a
computerized schedule from Columbia to support interest
deductions on Kondamudi's $120,000 loan.7 The schedule shows
interest payments of $16,182 in 1987 and $18,614 in 1988. No
canceled checks or Forms 1098 were offered to substantiate
petitioners' interest deductions. These amounts, although
questionable, are the only amounts substantiated by petitioners.
5 Pictures and a videotape in evidence show equipment
exists at the time the pictures and videotape were taken, but
they do not establish cost or when the equipment was placed into
service.
6 Petitioners classified the lease payments as interest.
7 Due to petitioners' overall lack of substantiation, we
need not address the issue of whether petitioners can deduct
interest payments made on behalf of their corporation.
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