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1997, petitioners reported nonpassive income or loss relating to
TGR II in the partnership income section.
OPINION
A. Whether Petitioners Have a Basis of $233,408 in the Storage
and Office Additions to the Hoefgen Avenue Property
Petitioners contend that they paid $233,408 in the early
1980's to add storage and office space to the Hoefgen Avenue
property. Respondent contends that petitioners have failed to
show that they are entitled to any basis in the additions to the
Hoefgen Avenue property.2
Petitioners rely in part on Zamora’s and Neal’s testimony to
substantiate their basis for the storage and office additions.3
Zamora credibly testified that he designed and oversaw the
construction of the storage addition at the Hoefgen Avenue
property in 1981 and 1982, and the office addition in 1983 and
1984. Zamora testified that the storage addition was not
significant because petitioners did not change the exterior or
roof structure of the building. Zamora did not testify about the
cost of the additions. Neal estimated that the replacement cost
2 Respondent allowed depreciation deductions for 15-year
property costing $22,895, for 5-year property costing $12,083,
and for 3-year property costing $48,044, which petitioners
reported on their 1982 return was placed in service in 1981 and
1982.
3 Petitioners offered no evidence to prove their contention
that they lost petitioner’s records when moving to the Jones
Maltsberger Road property.
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