Albert C. Johnson - Page 15

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          Petitioner claims entitlement to a $3,000 depreciation deduction            
          per year related to the barn, based on straight-line depreciation.          
               Section 167 generally allows as a depreciation deduction a             
          reasonable allowance for the exhaustion, wear and tear of property          
          used in a trade or business, or property held for the production of         
          income.  Under section 168, depreciation for an agricultural or             
          horticultural structure is calculated using a 10-year recovery              
          period.  Sec. 168(e)(3)(D)(i).  Under the straight-line method, the         
          cost or other basis of the property less its estimated salvage              
          value is deductible in equal annual amounts over the period of the          
          estimated useful life of the property.  Sec. 1.167(b)-1(a), Income          
          Tax Regs.                                                                   
               We accept petitioner's testimony that the barn was placed into         
          service in 1989 as part of his cattle-ranching operation and that           
          it had a 10-year life with a depreciable basis of $30,000.                  
          Accordingly, we hold that petitioner is entitled to a $3,000                
          depreciation deduction for each year in issue.                              
               To conclude, the following summarizes our determination of             
          petitioner's net income from his cattle-breeding operations for the         
          years in issue:                                                             

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