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Petitioner testified that he borrowed money from Dr. West to
support the formation and business affairs of Cilena. Petitioner
also presented documentary evidence and credible testimony with
respect to his purchases of the rental equipment. However,
petitioner’s continuous insistence that he still owns the rental
equipment is inconsistent with the evidence in the record.13
Petitioner has failed to present sufficient evidence to prove the
period of time he owned the rental equipment in 1993. Petitioner
presented a depreciation schedule, a schedule of expenditures
related to the equipment, the equipment lease, and his 1993 tax
return as support for his depreciation deduction, but he did not
adequately link the documents to provide a coherent basis upon
which to determine an appropriate deductible amount. Petitioner
did not provide evidence establishing that any of the
depreciation claimed was related to the portable clean room.
Accordingly, we hold that petitioner has not provided sufficient
evidence for us to estimate the amount of depreciation; as a
13Petitioner contends that he is still the legal owner
because Mr. Cotter never fulfilled the conditions prescribed by
the Form UCC-1 Financing Statement. Petitioner represented in
the Settlement Agreement that he was no longer the owner of the
rental equipment. The Form UCC-1 Financing Statement was
required as security for Mr. Cotter’s indemnity obligation to
petitioner for Aeternum liabilities assumed by Mr. Cotter. The
Form UCC-1 Financing Statement evidences only a security
interest, not an ownership interest, and petitioner has not
established that Mr. Cotter failed to fulfill his obligations
under the Settlement Agreement. See Cal. Com. Code sec. 9302
(West 1990); see also Waddell v. Commissioner, 86 T.C. 848, 858
(1986), affd. 841 F.2d 264 (9th Cir. 1988).
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