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in connection with Partners in excess of the amount allowed by
respondent.
The second issue is whether petitioner is entitled to a
Schedule C depreciation/section 179 expense deduction in excess
of the amount allowed by respondent. Petitioner claimed a
depreciation/section 179 expense deduction of $19,632 on his
return. Although not entirely clear from the record, it appears
that petitioner claimed the subject deduction in connection with
10 or 11 computers purchased for use in the travel agency
activity of Partners, as well as for computer parts and related
equipment.
It appears that the cost of the computers totaled $23,085,
which exceeded the $18,000 limitation for a section 179 expense
deduction for the year at issue.4 Thus, petitioner claimed a
section 179 expense deduction of $18,000 and claimed depreciation
on the excess cost using the 5-year modified accelerated cost
recovery system (MACRS), which resulted in a 1997 depreciation
deduction of $1,348 with respect to the excess cost. Petitioner
also used the 7-year MACRS to depreciate computer repair tools,
resulting in a 1997 depreciation deduction of $284. These
amounts totaled $19,632, the depreciation/section 179 expense
deduction claimed on petitioner's 1997 return.
4 See following discussion of sec. 179(b)(1).
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