Dennis L. and Sharon E. Hayden - Page 5

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               A Treasury regulation must be sustained if it "[implements]             
          the congressional mandate in some reasonable manner."  United                
          States v. Vogel Fertilizer Co., 455 U.S. 16, 24 (1982) (quoting              
          United States v. Correll, 389 U.S. 299, 307 (1967)).  The "issue             
          is not how the Court itself might construe the statute [to which             
          the regulation relates] in the first instance, 'but whether there            
          is any reasonable basis for the resolution embodied in the                   
          Commissioner's Regulation.'"  Schaefer v. Commissioner, 105 T.C.             
          227, 230 (1995) (quoting Fulman v. United States, 434 U.S. 528,              
          536 (1978)).  Normally, "Treasury regulations must be sustained              
          unless unreasonable and plainly inconsistent with the revenue                
          statutes".  Commissioner v. South Texas Lumber Co., 333 U.S. 496,            
          501 (1948).                                                                  
               The Code section primarily involved here is section                     
          179(b)(3)(A) and (d)(8), which is directed to the limitations in             
          the case of partnerships.  For purposes here, these limitations              
          have two sources.                                                            
               The genesis of section 179 is section 204(a), The Small                 
          Business Tax Revision Act of 1958, Pub. L. 85-866, 72 Stat. 1606,            
          1676, that provided a deduction for an additional first-year                 
          depreciation.  There was a $10,000 ($20,000 for joint returns)               
          limitation on the cost of the property subject to the additional             
          depreciation.  That statute did not provide any limitation on                
          partners.  Section 179(d)(8), relating to partnership                        
          limitations, first appeared in the Tax Reform Act of 1976, Pub.              
          L. 94-455, sec. 213(a), 90 Stat. 1525, 1547.  The legislative                

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