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additional amortization deductions for 1990 and 1991 in the
amount of $84,003 each. Petitioner also claims a net operating
loss carryover of $98,050 from prior years in tax year 1990, and
an NOL carryover of $142,031 in 1991.
In the notice of deficiency, respondent disallowed $63,571
and $68,978 of petitioner's claimed amortization deductions for
1988 and 1989, respectively. Respondent determined that
petitioner's liability was not fixed for the "Territory Payback
Agreement", and, therefore, petitioner was not entitled to
related amortization deductions. Respondent prepared substitute
returns for petitioner for the taxable years 1990 and 1991.
Respondent allowed petitioner Schedule C expenses of $16,800 and
$17,400 in lieu of amortization deductions for 1990 and 1991,
respectively, because petitioner had failed to establish that her
liability was fixed for the territory payback.
Respondent's determinations are presumed to be correct, and
petitioner bears the burden of proving that they are erroneous.
Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933).
Under section 167(a) a taxpayer may deduct as depreciation a
reasonable allowance for the exhaustion and wear and tear of
property used in a trade or business or held for the production
of income. An intangible asset may be the subject of an
allowance for depreciation (or amortization) if such asset is
known from experience or other factors to be of use in business
or in the production of income for a limited period of time which
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