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do not meet the test for being similar in character to property
for which the income forecast method of depreciation has been
approved. Additionally, respondent contends in the notice of
deficiency that in the event it is held that the assets on which
petitioners have claimed the income forecast method of
depreciation qualify for that method, a proper election has not
been made under section 2.10 of Rev. Proc. 87-57, 1987-2 C.B.
687, and the method is not allowed.
Respondent took the position in the judicial proceeding
that: (1) The income forecast method of depreciation is not a
valid method of depreciation to depreciate tangible personal
property of the type utilized in petitioners’ rent-to-own
businesses (i.e., furniture, appliances, televisions, stereo
equipment, and video tape recorders); (2) petitioners failed to
file elections pursuant to section 168(f)(1) to change their
method of depreciation to the income forecast method for the
assets placed in service for taxable years ending in 1987; (3)
petitioners improperly applied the income forecast method when
calculating depreciation deductions because petitioners failed to
forecast the income to be received from the assets being
depreciated and failed to make a reasonable adjustment for
salvage value of the assets being depreciated. Thus, in the
present case we need not consider two separate positions because
there is no indication that respondent’s position changed or that
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