Clajon Gas Co., L.P., Aquila Gas Pipeline Corp., Tax Matters Partner - Page 2




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               Michael Thompson, Martin M. Loring, and Lori J. Sellers, for           
          petitioner.                                                                 
               Robert M. Morrison, Michael C. Prindible, and Todd A. Ludeke           
          for respondent.                                                             

               HALPERN, Judge:  By notices of final partnership                       
          administrative adjustment dated April 28, 1997, respondent made             
          adjustments to partnership returns filed by Clajon Gas Co., L.P.            
          (Clajon), for taxable years ending December 31, 1990, September             
          25, 1991, December 31, 1991, and June 30, 1992 (the audit years).           
          Taking into account issues and items resolved by the parties, the           
          sole adjustments in dispute are respondent’s adjustments reducing           
          Clajon’s deduction for “pipeline depreciation”, as follows:                 
                    Tax Year Ended           Adjustment                               
                    12/31/90                 $7,920,799                               
                    9/25/91                  19,644,092                               
                    12/31/91                 4,372,916                                
                    6/30/92                  12,187,347                               
          The issue for our decision is the proper cost recovery period to            
          be used by Clajon in determining its depreciation deductions for            
          the property in question.                                                   
               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for the years at issue, and             
          all Rule references are to the Tax Court Rules of Practice and              
          Procedure.                                                                  
               Petitioner bears the burden of proof.  Rule 142(a).                    







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