Mahendra K. Tandon - Page 21

                                       - 21 -                                         

          conclude, therefore, that petitioner is not entitled to                     
          deductions for partnership losses in 1985, 1986, or 1987.                   
          Investment Income Credit                                                    
               Petitioner claimed a $1,000 investment tax credit on his               
          1985 tax return for the Chrysler.  Respondent disallowed the                
          credit.  Respondent argues that the Chrysler was not a "qualified           
          investment"; petitioner contends that it was.                               
               In 1985, sections 38(a) and 46(a) allowed an investment tax            
          credit to a taxpayer making a "qualified investment".  A                    
          "qualified investment" must be section 38 property.  Sec. 46(c).            
          Section 38 property is limited to certain property with respect             
          to which depreciation or amortization is allowable.  Sec. 48(a);            
          sec. 1.48-1(a), Income Tax Regs.  As observed above, petitioner             
          is not entitled to depreciate the Chrysler.  Moreover, because              
          petitioner has not adduced, and we are not aware of, any                    
          authority providing that the expenditure at issue is amortizable,           
          we conclude it is not.  See Mann v. Commissioner, T.C. Memo.                
          1993-201.  Accordingly, we conclude that petitioner is not                  
          entitled to an investment tax credit in 1985.                               
                    Dependency Exemption                                              
               On his 1986 tax return, petitioner claimed a dependency                
          exemption for Anupam.  Respondent disallowed the exemption.                 
          Respondent argues that petitioner did not prove that he provided            

Page:  Previous  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  Next

Last modified: May 25, 2011