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Respondent’s new theory constitutes a new, different matter, not
just another version of an issue or an adjustment previously
raised in a notice of deficiency, and respondent bears the burden
of proof regarding this fact issue. See Barton v. Commissioner,
993 F.2d 233 (11th Cir. 1993), affg. without published opinion
T.C. Memo. 1992-118; Abatti v. Commissioner, 644 F.2d 1385, 1390
(9th Cir. 1981), revg. T.C. Memo. 1978-392; see also sec. 7522;
Shea v. Commissioner, 112 T.C. 183 (1999).
The period for depreciation of property begins when property
is placed in service. See sec. 1.167(a)-10(b), Income Tax Regs.
Accordingly, VRI’s construction costs relating to the
Clubhouse are properly regarded as recoverable through
depreciation only if, and for the period that, VRI possessed an
ownership interest in the Clubhouse after the Clubhouse was
placed in service.
Generally, property is placed in service when it reaches a
condition of readiness and availability for a specifically
assigned function. See sec. 1.167(a)-11(e)(1), Income Tax Regs.
On July 19, 1996, the Golf Course and the Clubhouse opened and
play began. Absent evidence in these cases to the contrary, and
in light of respondent’s burden of proof on this issue, we treat
July 19, 1996, as the date the Clubhouse was placed into service.
Because the Clubhouse was not placed in service until
July 19, 1996, from the time construction of the Clubhouse began
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