- 10 - tax treatment of the remaining cost of the Improvements, $92,456 ($127,067 less $15,872 (furniture, fixtures, and equipment) and less $18,739 (payments made in lieu of rent)). Also in 1995, petitioners (1) bought cash registers for the Bakery for $3,475, and (2) placed in service a computer (75- percent business usage) in which petitioners had a basis of $2,865. Petitioners classified the cash registers and the computer as 5-year property on their 1995 tax return and claimed depreciation deductions in respect thereof for 1995 and 1996 using the 200-percent declining balance method and the midquarter convention over a recovery period of 5 years. Respondent does not dispute either petitioners’ classification of, or the amount of, claimed depreciation deductions, for either the cash registers or the computer. In 1996, petitioners bought $5,059 of equipment for the Bakery.5 5 So stipulated. As we interpret the parties’ stipulation, any part of the $5,059 that petitioners are not allowed to expense under sec. 179(a) (subject to the limitations of sec. 179(b)), discussed infra under II. Section 179 Election, shall be capitalized and depreciated under MACRS as 7-year property, using the 200-percent declining balance method and the midquarter convention. However, in the notice of deficiency, respondent determined that on Dec. 30, 1996, petitioners placed in service equipment (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011