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of the business use of the two automobiles for 1994.
Petitioners deducted expenses of $27,187 on the 1994
Schedule C they filed for Barbara’s Gift Shop for restoring and
improving their pond. These expenses did not relate to Barbara’s
Gift Shop.
3. Petitioners’ Schedule F
Petitioners reported on a Schedule F, Profit or Loss From
Farming, attached to their 1994 return that they had gross income
from their cattle activity of $1,593, total expenses of $3,043,
and a net operating loss of $1,450.
F. Notice of Deficiency
Respondent determined that petitioners were not entitled to
deduct the depreciation on the Cadillac and the Corvette.
Respondent also disallowed petitioners’ deduction of expenses
relating to the pond.
OPINION
A. Whether Petitioners May Deduct Depreciation for the Cadillac
and the Corvette
For petitioners to be entitled to deduct depreciation on
their automobiles for 1994, they must prove the amount of
business use of each automobile. See secs. 280F(b)(3),
168(g)(2). Petitioners must substantiate the business use of
their automobiles by adequate records or other evidence
corroborating their own statement of the amount, time and place,
and business purpose of the automobile use. See sec. 274(d)(4).
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