Mary T. King and Fatai O. King - Page 13




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             $5,700 for excavation and concrete work in connection with                 
             the installation of an electrical system at his newsstand                  
             on Wayne and Chelten Avenues and he paid $2,500 for the                    
             wiring of that system.  Respondent also concedes that                      
             petitioner paid permit fees in the aggregate amount of $50                 
             in connection with the electrical work.                                    
                  We agree with respondent that, except for the permit                  
             fees, the above payments represent capital expenditures                    
             that must be recovered through depreciation.  According to                 
             respondent, petitioners are entitled to a depreciation                     
             deduction of $497.50 with respect to the installation of                   
             the steel plates ($1,750) and electrical system ($2,500                    
             and $5,700), and a depreciation deduction of $1,435 for                    
             the expenditures attributable to the construction of the                   
             new newsstand ($4,100).  The depreciation deductions                       
             computed by respondent appear to be correct but, if                        
             petitioners do not agree with the amount of these                          
             depreciation deductions, then they will have an opportunity                
             to raise their disagreement during the proceedings under                   
             Rule 155.  Respondent also concedes that petitioners are                   
             entitled to deduct permit fees in the aggregate amount of                  
             $50.                                                                       
                  Petitioners claim a deduction in the amount of $2,467                 
             for supplies.  In support thereof, petitioners introduced                  






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