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language to mean that when a taxpayer places an asset in service
in a trade or business but cannot determine his or her basis in
the asset, the taxpayer may freely elect to use the asset's fair
market value at that time as the asset's depreciable basis.
Petitioners have misinterpreted the statutory provisions
governing depreciation. Section 1.167(g)-1, Income Tax Regs.,
unambiguously provides that a taxpayer should use a property's
fair market value as the basis of computing depreciation only if
less than the property's adjusted basis. An IRS publication,
such as the one cited by petitioners, is not to be construed as
an authoritative source of Federal income tax law. Zimmerman v.
Commissioner, 71 T.C. 367, 371 (1978), affd. without published
opinion 614 F.2d 1294 (2d Cir. 1979). In any event, the portion
of the IRS publication cited by petitioners does not pertain to
the determination of an asset's depreciable basis.
On brief, petitioners contend that the fair market value of
many of the assets underlying the depreciation in dispute did not
exceed the adjusted basis when placed in service. Petitioners,
however, have failed to present any evidence to substantiate the
cost bases of the assets which underlie the disputed claims for
depreciation. As a result, we cannot determine whether the fair
market value of any of the assets in question was less than
adjusted basis when the assets were placed in service. Moreover,
the record contradicts petitioner's assertion. For example,
petitioner admitted at trial that he calculated the depreciable
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