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elements of computer memory for that computer and for other
computers, and a flatbed computer scanner (the computer
equipment) described by petitioners on a Form 4562, Depreciation
and Amortization (Including Information on Listed Property),
appurtenant to the Schedule C. The computer equipment is listed
property, within the meaning of section 274(d)(4). See, e.g.,
Dugan v. Commissioner, T.C. Memo. 1996-155.2 Therefore,
petitioners must satisfy the substantiation requirements of
section 274(d). The elements to be proved with respect to listed
property are set forth in sec. 1.274-5T(b)(6), Temporary Income
Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). Those elements
include the amount of “business/investment” use based on an
allocation of the time the computer equipment is used.
Petitioners have failed to offer either adequate records or any
evidence substantiating Randall’s own statements with respect to
such use. See sec. 1.274-5T(c), Temporary Income Tax Regs., 50
Fed. Reg. 46016 (Nov. 6, 1985). Petitioners have, therefore,
failed to satisfy section 274(d) and, as a result, may claim no
deduction under section 179 for the computer equipment. See
2 Petitioners offered no evidence that the computer
equipment is excepted from the definition of listed property
because it was used exclusively at a regular business
establishment owned or leased by Randall, which, with certain
exceptions not here relevant, is not, also, a dwelling unit. See
sec. 280F(d)(4)(B). Indeed, confirmation documents with respect
to the purchase of the computer equipment show that it was
shipped to the address appearing on the Form 1040, which we
assume to be petitioners’ residence.
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