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section 1016(a)(1)(relating to adjustments to basis of
property).
Respondent contends that petitioner cannot meet the requirements
of section 177(a) because it was not taxable in 1983 and 1984
when its expenditures were incurred. Neither party cites court
opinions supporting its respective interpretations of section
177, and the issue appears to be one of first impression.
It is a well-settled principle that tax deductions are a
matter of legislative grace, and taxpayers must show that they
come squarely within the terms of the law conferring the benefit
sought. See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435,
440 (1934); Welch v. Helvering, 290 U.S. 111, 115 (1933); Wilkins
v. Commissioner, 120 T.C. 109, 112 (2003). Further, in
interpreting a statute, as in the instant cases, we start as
always with the language of the statute itself. Consumer Prod.
Safety Commn. v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980);
Fed. Home Loan Mortgage Corp. v. Commissioner, 121 T.C. ___, ___
(Sept. 4, 2003). We look to the legislative history primarily to
learn the purpose of the statute and to resolve any ambiguity in
the words contained in the text. Fed. Home Loan Mortgage Corp.
v. Commissioner, supra at ___; Wells Fargo & Co. v. Commissioner,
120 T.C. 69, 89 (2003); Allen v. Commissioner, 118 T.C. 1, 7
(2002). If the language of the statute is plain, clear, and
unambiguous, we generally apply it according to its terms.
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