- 228 -
deficiency. The items are a Morgan desk ($592.28), Lazarus
office machine ($258.76), a Morgan desk ($954.97), an IBM
typewriter ($696), and telephone equipment ($1,518.40). Each of
these items clearly has a useful life of more than 1 year, and,
consequently, for Federal income tax purposes, their cost must be
recovered through depreciation rather than as an expense.
The deductions claimed for office furniture and equipment
for the years 1975 and 1976 are in the amounts of $16,873.59 and
$4,407.96. There is no evidence in the record to show the items
for which these expenditures were incurred. The depreciation
schedule attached to the notice of deficiency sets forth items of
furniture and equipment that respondent determined were capital
expenses rather than ordinary expenses, and which petitioner
substantiated. Thus, because there is no evidence to show that
the items claimed constitute ordinary expenses, we sustain
respondent's determination.
For the year 1975 respondent disallowed a payment to Ohio
Bell in the amount of $7,359.75. This payment is for a CTC
telephone bill dated November 14, 1975, which consists of a one-
time charge in the amount of $6,626.30 and other charges for
services totaling $661.16. Respondent concedes that petitioner
is entitled to deduct the other charges in the amount of $661.16.
However, petitioner has failed to verify the type of equipment or
Page: Previous 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 NextLast modified: May 25, 2011