- 64 -
We agree with respondent that under our holding that
the transaction was a sham in substance, petitioners are
not entitled to recognition of their cash investment of
$57,420 in the form of depreciation deductions. See
Gilman v. Commissioner, T.C. Memo. 1989-684 (on the basis
of the Court's finding that the transaction lacked economic
substance and business purpose, all of the taxpayer's
depreciation deductions were disallowed with no offset
allowed for the taxpayer's cash investment of $45,000);
Mele v. Commissioner, T.C. Memo. 1988-409 (on the basis
of the Court's finding that the transaction lacked economic
substance, all of the taxpayer's depreciation deductions
were disallowed with no offset for taxpayer's cash invest-
ment of $88,700). Accordingly, we sustain the Rule 155
computation submitted by respondent.
Upon consideration of the foregoing,
An appropriate order will
be issued, and decision will
be entered in accordance with
respondent's Rule 155
computation.
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