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including the farmhouse. One of the business activities of Wolf
Creek Farm was the leasing of the homestead, including the
farmhouse. Thus, the farmhouse is property used in the
corporation’s trade or business.
We hold that Wolf Creek Farm is entitled to a deduction for
depreciation of the farmhouse for each of the years at issue as
claimed.
d. Taxes
Wolf Creek Farm deducted property taxes of $257 in 1995,
$208 in 1996, and $190 in 1997 attributable to the farmhouse.
Wolf Creek Farm owned the homestead. Section 164(a)(1) allows
the owner of property a deduction for real property taxes
regardless of whether they are paid or incurred in a trade or
business. We hold, therefore, that Wolf Creek Farm may deduct
property taxes as claimed in the years at issue.
e. Summary of Food and Lodging Expenses
To summarize, Wolf Creek Farm may deduct the following
expenses for the years at issue:
11/30/95 11/30/96 11/30/97
Property tax--house $257 $208 $190
Property insurance--house 667 631 -–
Depreciation--house 569 587 575
Total 1,493 1,426 765
Wolf Creek Farm may not deduct the following food and
lodging expenses:
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