Ragnhild A. Westby - Page 33

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          petitioner’s expenses were grouped for tax return purposes.  We             
          shall review each Schedule C expense category14 and the evidence            
          in support of each category to reach a conclusion regarding the             
          parties’ respective positions.  Our conclusions are summarized in           
          a chart that appears at the end of this subsection on page 79.              
                         a.  Depreciation and Section 179 Expense                     
               For the years at issue, petitioner claimed depreciation                
          expense deductions in the following amounts:                                
                         Year           Amount                                        
                         1987           $2,546                                        
                         1988           11,974                                        
                         1989           2,444                                         
                         1990           1,467                                         
          The depreciation schedule included as part of Mr. Aunan’s                   
          workpapers shows that the depreciation expense deductions were              
          calculated as follows:                                                      













               14We have not addressed separately the Schedule C category             
          of collection fees that was included only on petitioner’s 1989              
          return, but we have considered any such expenses as part of other           
          categories.                                                                 

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