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they assert that they did not realize any capital gain from the
conversion as their basis in the bus was equal to the amount of
the insurance proceeds received. Petitioners' argument
essentially is that their adjusted basis in their depreciable
property is not decreased by depreciation that they did not claim
as a deduction on their Federal income tax returns.
Respondent's determinations of fact are presumptively
correct, and petitioners bear the burden of proving otherwise.
See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
Petitioner testified that he constantly made improvements to
the bus that he did not report or depreciate. Petitioners kept
most of the receipts pertaining to the conversion in the bus.
Thus, when the bus burned, the receipts were destroyed. However,
petitioners were able to submit a few receipts for materials used
in the conversion that total $2,231.02 for 19852 and $431.74 for
1986. At trial, petitioners submitted a list they prepared of
the conversion items and their approximate costs. We found
2Petitioners submitted dated receipts for 1985 that totaled
$561.27 and an undated receipt for $1,669.75. The undated
receipt is from Kampers World and is made out to petitioner. One
of the items listed on the receipt is a generator for $1,590. As
petitioner testified that the first item that he purchased for
the conversion was a generator, we have assigned this cost to the
year 1985.
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