Mary K. Fisher and Charles F. Patterson, et al. - Page 14

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          additional vehicles), and respondent's concession of $5,622 of              
          the $8,166 in depreciation claimed on their return, the total               
          amount of depreciation in dispute for 1992 is $3,288.  With                 
          respect to the amount remaining in dispute, respondent argues               
          that petitioners' failure to substantiate the depreciable bases             
          in or acquisition dates of the assets in question precludes their           
          claim for depreciation.                                                     
               (d)  Office Expenses in 1992                                           
               Just prior to trial, petitioners claimed deductions in the             
          amount of $958, attributable to office expenses, which were not             
          claimed on their 1992 return.  Although petitioners repeated                
          their assertion of this claim in their posttrial answering brief,           
          they did not discuss this issue at trial, and have presented no             
          evidence to substantiate these claimed expenses.                            
                                       OPINION                                        
               We begin by noting that respondent's determinations are                
          presumed correct, and petitioners bear the burden of proving that           
          those determinations are erroneous.  Rule 142(a); Welch v.                  
          Helvering, 290 U.S. 111, 115 (1933).  Moreover, deductions are a            
          matter of legislative grace, and petitioners bear the burden of             
          proving that they are entitled to any deductions claimed.                   
          INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992).                      
          1.   Net Operating Loss                                                     
               We first address whether petitioner Charles F. Patterson is            
          entitled to claim an NOL on his 1991 return in the amount of                




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