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tions is misplaced. Section 25.2511-1(c)(1) and (g)(1), Gift Tax
Regs., deal only with the Federal gift tax and do not support
petitioners’ position that for Federal income tax purposes they
are entitled to the depreciation deductions that they are claim-
ing with respect to the computer simulator.
Assuming arguendo that any gift of the computer simulator by
SDC to TGC were to be treated as a gift of that simulator to
petitioners for Federal gift tax purposes, it does not follow
that petitioners, as the stockholders of TGC, are entitled to
depreciation deductions for Federal income tax purposes with
respect to that simulator. A stockholder:
is not usually entitled to a depreciation deduction for
property owned by his corporation because he has no
direct economic interest or investment in the property.
* * * Where the corporation is the owner of the prop-
erty and uses it in its business, the corporation, not
the stockholders, is entitled to the depreciation
deduction.
Hunter v. Commissioner, 46 T.C. 477, 490 (1966).
On the record before us, we find that, assuming arguendo
that we were to accept petitioners’ arguments that SDC trans-
ferred the computer simulator to TGC by gift and that any such
gift to TGC represented a gift for Federal gift tax purposes to
petitioners as the stockholders of TGC, petitioners have failed
to establish that they are entitled for the taxable years at
5(...continued)
set forth below to their reliance on sec. 25.2511-1(c)(1) and
(g)(1), Gift Tax Regs.
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