Mun Li Fong - Page 5

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          depreciation expense claimed on her 1989 Federal income tax                 
          return relating to the properties.                                          
               Respondent alleges (and for purposes of acting on the                  
          instant motion for summary judgment we assume) that during                  
          settlement negotiations regarding the 1989 Fong case, petitioner            
          argued that the properties she received on liquidation of LY                
          Enterprises had a value of approximately $2 million and that the            
          Lily Partnership and petitioner properly used that figure in                
          computing the depreciable taxable bases of, and for computing               
          depreciation on, the properties.                                            
               In February of 1995, in the 1989 Fong case, petitioner and             
          respondent entered into an agreement to settle, among all other             
          issues, the issue regarding the proper depreciation expense to be           
          allowed for 1989 to the Lily Partnership and to petitioner                  
          relating to the properties, and (we assume for purposes of                  
          petitioner's motion for summary judgment) the proper total tax              
          bases of the properties.                                                    
               On February 6, 1995, in the 1989 Fong case, petitioner and             
          respondent filed with this Court a stipulation of settled issues            
          reflecting, in pertinent part and with regard to the depreciation           
          issue that was settled, only the specific amount of the reduction           
          to petitioner’s claimed depreciation expense for 1989 relating to           
          the properties (namely $21,160).                                            







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