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Tax credits are a matter of legislative grace, and
petitioner bears the burden of proving his entitlement to the tax
credit he claimed.7 Rule 142(a); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934). Petitioner maintains he is
eligible for the energy credit based upon his status as a
beneficiary of HEH. The parties do not dispute that, if HEH
placed depreciable solar energy property in service during 1995,
HEH became eligible for the energy credit through its ownership
of that property. Secs. 38(b)(1), 46(2). Petitioner asserts
that the apportionment of part of HEH’s energy credit to him was
proper because HEH was required to allocate $650 of HEH’s income
to him under the terms of the partnership agreement and HEH
actually allocated $650 of income to him for 1995, as evidenced
by the amended Schedule K-1 for 1995.
While it is true that the partnership agreement reflects an
obligation on the part of HEH to allocate and distribute $650 to
petitioner, HEH’s obligation was subject to certain conditions
which required petitioner to identify several referrals, write a
letter of reference, and make his energy payments on time.
Moreover, under the terms of the partnership agreement, HEH was
7Sec. 7491, which is effective for Court proceedings that
arise in connection with examinations commencing after July 22,
1998, places the burden on the Commissioner in certain
circumstances. However, petitioner has not contended, nor is
there evidence, that his examination commenced after July 22,
1998, or that sec. 7491 applies.
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