River City Ranches #4 - Page 92

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          depreciation and other deductions claimed by a partnership, it is           
          incumbent on petitioners to substantiate and establish the                  
          partnership's entitlement to those deductions under the terms of            
          the applicable statutes permitting those deductions.  See New               
          Colonial Ice Co. v. Helvering, 292 U.S. 435 (1934); Karme v.                
          Commissioner, 673 F.2d 1062, 1065 (9th Cir. 1982), affg. 73 T.C.            
          1163 (1980).                                                                
          Issue 1.  Depreciation Deductions                                           
               Section 167 generally allows as a depreciation deduction a             
          reasonable allowance for the exhaustion, wear and tear of                   
          property used in business or of property held for the production            
          of income.  The person who bears the economic loss of invested              
          capital resulting from the exhaustion, wear and tear of business            
          property or property held for production of income is the one               
          entitled to the depreciation deduction.  See Helvering v. F. & R.           
          Lazarus & Co., 308 U.S. 252, 254 (1939).                                    
               In the instant cases, petitioners and respondent recognize             
          that for RCR #4, RCR #6, and OGT 90 to be entitled to their                 
          claimed depreciation and certain other deductions, each                     
          partnership must be the owner for tax purposes of the specific              
          numbers of breeding sheep that it allegedly purchased and placed            
          in service.  Respondent raises no contention that each                      
          partnership was in an activity not engaged in for profit.                   
          Although respondent has not asserted that each partnership's                

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