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airplanes. Respondent admits that amounts representing
depreciation for airplanes owned by petitioner were considered in
determining the amount that respondent would accept as a
reasonable estimate of Allied's airplane expenses. Respondent,
however, argues that Allied is not entitled to depreciate
airplanes for which it did not have the burdens and benefits of
ownership.
Allied bears the burden of establishing that it is entitled
to additional deductions. Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); Rockwell v. Commissioner,
512 F.2d 882, 886 (9th Cir. 1975), affg. T.C. Memo. 1972-133.
This includes substantiating the amount of the item claimed.
Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam
540 F.2d 821 (5th Cir. 1976).
Generally, section 167 provides that there shall be allowed
as a deduction for depreciation a reasonable allowance for
exhaustion and wear and tear of property used in the taxpayer's
trade or business or held for the production of income. Sec.
167(a); sec. 1.167(a)-1(a), Income Tax Regs. Traditionally, such
allowance is primarily intended to provide a nontaxable fund to
restore property used in producing income at the end of such
property's useful life and is granted to the person who uses
property in his trade or business or for the production of income
and who incurs a loss resulting from the depreciation of capital
that he has invested. Helvering v. F. & R. Lazarus & Co., 308
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