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granted to petitioners in respect of the Improvements petitioners
made.
Thirdly, we have already concluded that there was not any
rent reduction, apart from the 6-month rent holiday, and so the
requirement imposed by the opening flush language of section
110(a) has been satisfied only to that extent in the instant
case.
Petitioners’ position is not advanced by their section 110
contention.
We hold for respondent on this issue.
II. Section 179 Election
Petitioners contend that if we sustain respondent’s
determination on the section 162 issue, which we have, then they
will need to file amended tax returns. Petitioners further
contend that if amended tax returns are required, then
petitioners must be allowed to make section 179 elections on such
tax returns. Petitioners explain that they did not make section
179 elections on their tax returns for 1995 and 1996, because
“such election would have no effect on the amount of the refund
due the petitioners, assuming the construction costs deducted
were determined to be allowable.” In contending that they should
now be allowed to make valid elections under section 179,
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