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section 6662(a).
OPINION
Petitioners bear the burden of proving that the determina-
tions in the notice are erroneous.3 See Rule 142(a); Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Claimed Depreciation Deductions
Petitioners no longer contend that they are entitled to the
respective depreciation deductions that they claimed in petition-
ers’ 1997 return and petitioners’ 1998 return. That is because,
according to petitioners: (1) SDC transferred the computer
simulator to TGC by gift; (2) SDC’s alleged gift of the computer
simulator to TGC was a gift to petitioners as the stockholders of
TGC for purposes of determining any depreciation deductions
allowable with respect to that simulator; (3) pursuant to section
1015(a), petitioners’ basis in that simulator for such purposes
is SDC’s cost of, and thus its basis in, that simulator; and
(4) SDC’s cost of, and thus its basis in, the computer simulator
3The parties do not address the application of sec. 7491(a)
or (c) in the instant case. Petitioners filed petitioners’ 1997
return on or about Aug. 15, 1998, and petitioners’ 1998 return on
or about July 16, 1999. We presume that respondent's examination
of those returns began after July 22, 1998, and that sec. 7491(a)
and (c) is applicable in the instant case. However, petitioners
do not argue that the burden of proof shifts to respondent under
sec. 7491(a). Even if petitioners had advanced such an argument,
they have not established that they have complied with the
applicable requirements of sec. 7491(a)(2). Under the circum-
stances presented here, we conclude that the burden of proof does
not shift to respondent under sec. 7491(a).
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