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sustains respondent's determination that no deduction is allowed
under section 174(a).
Petitioners contend, alternatively, that the $7,000 cost of
the Porsche engine is deductible under section 179. Under
section 179, a taxpayer may elect to treat the cost of any
section 179 property as a current expense in the year such
property is placed in service. Sec. 179(a). The aggregate cost
that a taxpayer may deduct under section 179, for the year 1991,
may not exceed $10,000.3 Section 179(c)(1) provides that an
election must:
(A) specify the items of section 179 property to which
the election applies and the portion of the cost of each of
such items which is to be taken into account under
subsection (a), and
(B) be made on the taxpayer's return of the tax imposed
by this chapter for the taxable year.
Petitioners made no election on their income tax return for
1991 to expense the $7,000 under section 179 for the Porsche 928
S4 engine. They are precluded from making that election at this
time. Starr v. Commissioner, T.C. Memo. 1995-190, affd. without
published opinion 94 F.3d 1146 (9th Cir. 1996).
Petitioners next argue that, if the subject engine's cost
cannot be expensed under either sections 174 or 179, the cost
3 The dollar limitation has been increased for subsequent
years.
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