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Tax Regs. Once made, this election may not be revoked "except
with the consent of the Secretary." Sec. 179(c)(2); accord sec.
1.179-5(b), Income Tax Regs. Moreover, the taxpayer shall
maintain records that permit specific identification of each
piece of section 179 property and reflect how and from whom such
property was acquired and when such property was placed in
service. Sec. 1.179-5(a), Income Tax Regs.
The expense deduction under section 179(a) for any tax year
"shall not exceed the aggregate amount of taxable income of the
taxpayer for such taxable year which is derived from the active
conduct by the taxpayer of any trade or business during such
taxable year"; however, any amount so disallowed may be carried
forward to later taxable years. Sec. 179(b)(3)(A) and (B).
Taxable income derived from a trade or business is computed
without taking into account any deduction allowable under section
179(a). Sec. 179(b)(3)(C). Additionally, for 1997, the
allowable deduction under section 179(a) was limited to $18,000.
Sec. 179(b)(1).
Petitioner presented no documentary evidence to prove the
purchase, identity, or cost of the computers and other related
equipment for which he claimed a depreciation/section 179 expense
deduction for 1997. Moreover, petitioner had no taxable income
from a trade or business for the year at issue because his
allowable trade or business expenses (not including the section
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Last modified: May 25, 2011