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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’s
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