David C. Hutchinson, et al. - Page 19

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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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