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equipment. This Court ruled in Kwan v. Commissioner, T.C.
Summary Opinion 2002-16, that petitioner was not entitled to any
section 179 expense deduction for 1997 with respect to computers
and computer equipment. Nevertheless, petitioner carried over
$1,616 as a “deduction for 1997.” This is improper on its face.
Petitioner had a collection of computer and computer equipment
receipts. Respondent allowed petitioner a deduction of $1,465 on
this issue. Petitioner did not show any credible business reason
for the purchase of an additional computer and computer equipment
to satisfy the requirement that the expenses were ordinary and
necessary. In any event, because petitioner had no taxable
income from a trade or business, he is not entitled to a section
179 deduction. Sec. 179(b)(3)(A). Accordingly, respondent’s
determination on this issue is sustained.
Respondent also allowed $2,200 of the $6,600 claimed as rent
expense and disallowed the remaining $4,400 because petitioner
did not establish that that amount was an ordinary and necessary
business expense paid in 1998. Petitioner placed in evidence one
lease running through March 31, 1998, which we assume continued
on a month-to-month basis through August, and another lease for
the remainder of the year.
Petitioner admitted that there were other businesses that
used the address covered by the second lease. Petitioner did not
prove that he paid all the amounts in issue. Nor did he provide
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