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improvements to property they leased (as “tenant”) to
operate a bakery.
(2) Whether petitioners may elect to expense section
179 property they placed in service in 1995 and 1996.
FINDINGS OF FACT
Some of the facts have been stipulated; the stipulations and
the stipulated exhibits are incorporated herein by this
reference.
Petitioners, Michael A. McGrath (hereinafter sometimes
referred to as Michael) and Frances Y. McGrath, resided in
Slidell, Louisiana, when they filed the petition in the instant
case.
In 1995 petitioners executed three agreements relevant to
the instant case: (1) A lease (hereinafter sometimes referred to
as the Lease), (2) a T.J. Cinnamons Unit Franchise Agreement
(hereinafter sometimes referred to as the Franchise Agreement),
and (3) a Standard Form of Agreement Between Owner and Contractor
(hereinafter sometimes referred to as the Construction
Contract).3
3 So stipulated. Both the Franchise Agreement and the
Construction Contract show only Michael’s name and signature,
while the Lease shows the names and signatures of both
petitioners. The Schedule C, Profit or Loss From Business, on
petitioners’ 1995 tax return shows only Michael as proprietor,
while the 1996 tax return Schedule C shows both petitioners as
proprietor. The parties do not appear to believe that any issue
in the instant case is affected by whether the business was owned
solely by Michael or was owned jointly by both petitioners.
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