112 T.C. No. 11
UNITED STATES TAX COURT
DENNIS L. HAYDEN AND SHARON E. HAYDEN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 590-98. Filed March 19, 1999.
Ps are the sole partners in L. During 1994, L expended
$26,650 on sec. 179 property and elected to expense $17,500
of that amount. Without regard to this deduction, L had no
taxable income for the 1994 taxable year. The deduction
under sec. 179 flowed through to Ps' 1994 return. Sec.
1.179-2(c)(2), Income Tax Regs., provides that a
"partnership may not allocate to its partners as a sec. 179
expense deduction for any taxable year more than the
partnership's taxable income limitation for that taxable
year". Ps contend that the regulation is invalid. Held:
Sec. 1.179-2(c)(2), Income Tax Regs., is valid and
respondent's disallowance of the deduction is sustained.
Dennis L. Hayden and Sharon E. Hayden, pro se.
Brian M. Harrington, for respondent.
OPINION
DAWSON, Judge: This case was assigned to Special Trial
Judge Carleton D. Powell pursuant to section 7443A(b)(3) and
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