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(2) Petitioner expended $4,471.12 for office improvements
during 1987 (Ex. 38-R, lines 222-228).
(3) Petitioner purchased a copier for $3,068.64 during 1987
(Ex. 38-R, lines 323-332).
(4) Petitioner purchased computer furniture for $3,003.09
during 1987 (Ex. 38-R, lines 212-218).
(5) Petitioner purchased office furniture and computer-
related items during 1988 totaling at least $5,632.26.16
Respondent has conceded that petitioner expended the above-
listed amounts and that petitioner may depreciate these items but
attempts to reconfigure petitioner’s deduction by offering a
different depreciation alternative (7-year depreciation). We
reject respondent’s attempt to recalculate petitioner’s
depreciation and section 179 expense deduction because
respondent, who raised this issue for the first time in a
supplemental status report filed after trial, had the burden of
producing evidence regarding the proposed recalculation and
15(...continued)
the summary exhibits, Exhibits 38-R through 41-R, will assist the
parties in understanding which items we are allowing petitioner
to deduct and in preparing the Rule 155 computations.
16Our inability to account for the full cost of items
purchased during 1988 and included in the sec. 179 expense
deduction claimed by petitioner is attributable to the fact that
petitioner’s depreciation and sec. 179 records were unbundled
during the pretrial review of petitioner’s records and mixed in
with petitioner’s office supplies records. We have no doubt,
however, that petitioner expended the amounts claimed for 1988
(Ex. 39-R, lines 228-238, 241, 243-246, 248-259).
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