Allied Marine Systems, Inc. - Page 10

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          U.S. 252, 254 (1939); Ryman v. Commissioner, 51 T.C. 799, 802 n.5           
          (1969).  Depreciation may generally be deducted to the extent               
          that the taxpayer proves that he or she actually expended capital           
          in the acquisition or improvement of the property.  Helvering v.            
          F. & R. Lazarus & Co., supra at 254; Currier v. Commissioner, 51            
          T.C. 488, 492 (1968).                                                       
               Allied does not deny that petitioner, not Allied, owned the            
          airplanes, and Allied does not contend that it provided funds for           
          the acquisition of the airplanes.  Although Allied paid some                
          expenses of the airplanes during the relevant period, Allied has            
          not provided any proof that it had a capital investment in the              
          airplanes.  Accordingly, Allied has failed to prove its                     
          entitlement to any additional depreciation deductions with                  
          respect to petitioner's airplanes.                                          
               For 1989, Allied argues that, based on the cost per hour for           
          each aircraft to which petitioner testified and the stipulated              
          number of business hours flown, Allied must have incurred                   
          additional expenses.  Allied's position is unsupported by the               
          record.  Respondent determined that Allied was entitled to                  
          $32,110 of airplane expenses for 1989.  Based on a concession by            
          respondent, the allowance will be $36,360.  At trial, Allied                
          introduced various receipts as evidence of airplane expenses.               
          The receipts totaled less than $16,000, and not all of the                  
          expenses were paid by Allied.  Without supporting independent               






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