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reasonableness of the income projections, if any--other than Mr.
Weiss' assurances to us that he thought that Oshtemo-Kalamazoo
had a tremendous “upside” potential. In sum, petitioners'
evidence falls far short of demonstrating that the Oshtemo-
Kalamazoo program possessed the economic substance needed to
support the tax deductions and credits at issue. We sustain
respondent's determination as to this issue.
Bases of Amortizable Assets
The Internal Revenue Code permits taxpayers to claim
deductions for amortization in specific situations, for example,
the amortization of the cost of acquiring a lease under section
178. Section 1016 requires adjustments to basis with respect to
amounts deducted as amortization expenses. Petitioners have
provided no evidence with respect to the bases or costs of assets
amortized by Oshtemo-Kalamazoo. We therefore have no cause to
question respondent's disallowance of amortization deductions.
Examination of Partnership Return
On brief, petitioners attack respondent's disallowance by
insisting that respondent disallowed the losses and credits
claimed on their returns without initially making adjustments to
the partnership Federal income tax returns. Even if true,
petitioners' assertion does not avail them here. A trial before
this Court is a proceeding de novo, and our determination as to
petitioners' tax liability must be based on the merits of the
case and not on any record developed at the administrative level.
Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324, 328
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