Juan N. and Miriam J. Villareal, et al. - Page 9

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               Section 179 permits a taxpayer to make an election to                  
          expense the cost of section 179 property.  Sec. 179(a).  The                
          amount allowed a taxpayer as a deduction under section 179 can              
          not exceed the aggregate amount of taxable income of the taxpayer           
          for such taxable year which is derived from the active conduct by           
          the taxpayer of any trade or business during such taxable year.             
          Sec. 179(b)(3)(A).  A taxpayer may carry over a deduction                   
          disallowed under section 179(b)(3)(A) to another taxable year.              
          Sec. 179(b)(3)(B).                                                          
               Petitioners' 1994 transaction report expense amounts do not            
          match the amounts reported on petitioners' 1994 Federal income              
          tax return even though both documents were prepared by Mr.                  
          Tijerina's firm.  Petitioner, using his 1994 transaction report,            
          testified that petitioners purchased refurbished stoves and other           
          equipment in 1994 for Villa Cabana at a total cost of $6,000.04.            
               Once again, we note the absence in the record of any                   
          testimony or other evidence which would indicate that petitioners           
          attempted to substantiate their claimed deductions by contacting            
          the vendor from which they purchased the restaurant equipment.              
          Petitioners testified that they bought the equipment used, but              
          the record does not indicate the condition of the equipment.                
          Petitioners have failed to offer any reasonable evidentiary basis           
          by which this Court could make a close approximation or estimate            
          of petitioners' claimed deductions.                                         






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