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for each year during which petitioners held the condo for rental
(i.e., for 1993, 1994, and 1995). The parties stipulated that
during 1993 and 1994 petitioners rented the condo, and we have
found that they rented the condo for part of 1995. As noted
above, the parties stipulated that petitioners’ adjusted basis in
the condo must reflect at least a reduction of $5,491 for the
depreciation that petitioners claimed in Schedule E of their 1995
joint return. Respondent contends that petitioners’ adjusted
basis in the condo should also reflect reductions for deprecia-
tion of $5,491 for each of the years 1993 and 1994.
We agree with respondent that section 1016(a)(2) requires a
decrease in petitioners’ basis in the condo, determined under
section 1012 (i.e., the cost), for depreciation allowed or
allowable, whichever is greater, under section 167(a). See secs.
1011(a), 1012, 1016(a)(2); see also Reithmeyer v. Commissioner,
26 T.C. 804, 815 (1956). On the record before us, we find that
petitioners have failed to carry their burden of proving that
they are not entitled for each of the years 1993 and 1994 to
depreciation of at least $5,491 with respect to the condo.13 On
13It is not clear from the record whether the depreciation
of $5,491 for 1995, which the parties stipulated must be taken
into account as a reduction in calculating petitioners’ adjusted
basis in the condo, was computed for a full year or for a period
that began on Jan. 1, 1995, and ended on July 20, 1995, when
petitioners sold the condo. The parties stipulated that peti-
tioners’ adjusted basis in the condo must reflect at least a
reduction for the depreciation of $5,491 that petitioners claimed
in the Schedule E of their 1995 return, and petitioners sold the
condo on July 20, 1995. We believe that the depreciation for
1995 of $5,491, which the parties stipulated must be reflected as
(continued...)
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