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The Chestnut property had been used as a fish processing
factory, and November expended approximately $400,000 to improve
and make the Chestnut property suitable for the bingo operations.
November expended $222,171, $166,553, and $25,915 during 1990,
1991, and 1992, respectively, to convert it into a bingo
operation. Based on those expenditures, November claimed
depreciation on a 10-year basis equal to the term of the Chestnut
property lease in the respective amounts of $30,545, $40,168, and
$41,464 for the 1991 through 1993 tax years.
The Lichtys and November, during October 1991, jointly
entered into a lease of the Chestnut property. The Lichtys’
involvement was through their corporate entity, EDL Properties,
Inc. (EDL). Under the terms of the lease, the Lichtys’ entity
was obligated for a $6,793.36 monthly rental payment for the
Chestnut property, beginning February 10, 1991.
Disagreements arose between petitioner/November and the
Lichtys and Gilbert concerning the bingo operation, and the
Lichtys advised petitioner that it was not likely that he would
be allowed to continue as the bingo operator. On February 1,
1991, petitioner and November filed suit against the Lichtys and
others, treating the sublease of the property and note for
$450,000 as rightful and seeking specific performance and a
temporary injunction. Petitioner sought exclusive use of the
Chestnut property for the bingo operation and to keep the Lichtys
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