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Typically, computers and peripheral equipment are listed
properties under section 280F(d)(4)(A)(iv). However, computers
and peripheral equipment used exclusively at a regular business
establishment will not constitute listed property. A personal
residence will qualify as a regular business establishment if the
requirements of section 280A(c)(1) are satisfied. See sec.
280F(d)(4)(B). For the reasons set forth above, petitioner
failed to satisfy the requirements of section 280A(c)(1).
Therefore, the computers and peripheral equipment are listed
properties and subject to the strict substantiation requirements
of section 274(d).
At trial, petitioner presented a one-page list of claimed
office expenses. Petitioner did not present receipts or testify
as to the date of purchase and purchase price of the computers
and printers. Nor did petitioner prove the time and place where
the expenses were incurred and the business purpose of the
expenses. See sec. 274(d). Therefore, petitioner is not
entitled to a deduction for the computers and printers.
Generally, the acquisition costs of machinery and equipment,
such as facsimile machines, must be capitalized. See sec.
263(a); sec. 1.263(a)-2(a), Income Tax Regs. A taxpayer is
entitled to depreciation deductions pursuant to sections 167 and
168. For 1996, to the extent that the total expenditures do not
exceed $17,500, a taxpayer can elect to currently deduct the cost
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Last modified: May 25, 2011