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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.]
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