- 16 - by the general public, is subject to a nonexclusive license, has not been substantially modified, and is not part of the acquisition of a trade or business (canned software), is not a section 197 asset and is not subject to the lengthy amortization requirement. Sec. 197(e)(3). A taxpayer may depreciate canned software by employing the straight-line method with a useful life of 3 years. Sec. 167(f)(1)(A). Therefore, petitioner is entitled to a depreciation deduction for the three items of software. Otherwise, we sustain respondent’s determination as to the remaining amount for office expenses. 8. Rent Petitioner deducted $4,320 for rent of an office and storage space for records. Respondent concedes that petitioner substantiated $1,387 for office rent. Petitioner provided canceled checks of $3,070 for office rent. Petitioner is entitled to a deduction of $3,070 for office rent. Petitioner presented canceled checks payable to Public Storage. The first check of January 10, 1994, was drawn from BHSMM’s checking account. The remaining checks were from BHTC’s checking account. Petitioner testified that he rented a public storage lot to store documents related to BHTC. The Court is unable to determine whether the storage unit was related to BHTC’s trade or business. We do not find petitioner’sPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011