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return, they reported a $4,879 current year disabled access
credit attributable to the purchase of the system. After taking
into account applicable limitations, the current year disabled
access credit resulted in a claimed general business credit of
$2,969. See sec. 38. The balance of the 1995 credit ($1,910)
was treated as a carryforward general business credit on a Form
3800, General Business Credit, included with petitioners’ 1996
Federal income tax return. Taking into account applicable
limitations, they claimed a general business credit of $1,114 for
that year, all of which is attributable to the purchase of the
system in 1995.
In the notice of deficiency, respondent disallowed the
disabled access credit for 1995 and the associated carryforward
to 1996; instead respondent treated the entire cost of the
intraoral camera system as a deductible business expense under
section 179. According to the explanation contained in the
notice of deficiency, the disabled access credits attributable to
the system were disallowed because the system “does not permit
patients to be treated who were excluded from services before the
purchase of the camera.”
Discussion
Subject to various limitations, an eligible small business
is entitled to a disabled access credit for eligible access
expenditures for the taxable year. Sec. 44. The parties agree
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Last modified: May 25, 2011