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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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