- 17 - Petitioners also contend that the issue of whether VRI’s Clubhouse construction costs would have been recoverable by VRI through depreciation represents a new factual issue under Rule 142(a) and that respondent should bear the burden of proof with regard thereto. Respondent contends that ownership of the Clubhouse was held by VRI during construction from 1994 through the transition period and until April 21, 1999, when the deed to the Golf Course and to the Clubhouse was transferred out of escrow to VCI, and therefore that VRI had a depreciable interest in the Clubhouse. Generally, for the years in issue, the burden of proof is on the taxpayer with regard to factual issues. Rule 142(a), however, states that in the case of any “new matter” the burden of proof shall be upon respondent. In Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500, 507 (1989), we summarized the distinction between new theories that are treated as new issues and new theories that simply supplement previously raised issues as follows: A new theory that is presented to sustain a deficiency is treated as a new matter when it either alters the original deficiency or requires the presentation of different evidence. A new theory which merely clarifies or develops the original determination is not a new matter in respect of which respondent bears the burden of proof. [Citations omitted.]Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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