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For the identical reasons cited in Arevalo, we conclude that
petitioners did not receive the benefits and burdens of ownership
with respect to the pay phones. See id. at 253. Since
petitioners did not receive a depreciable interest in the pay
phones, they are not entitled to claim a depreciation deduction
under section 167. See id.
III. ADA Tax Credit
In Arevalo, we discussed in some detail the interplay of the
general business credit under section 38 and the disabled access
credit under section 44(a). Id. at 254. We concluded that the
taxpayer’s investment in the pay phones did not constitute an
eligible access expenditure and thus found it unnecessary to
consider whether the taxpayer’s pay phone activities constituted
an eligible small business. Id. at 255. We explained that “In
order for an expenditure to qualify as an eligible access
expenditure within the meaning given that term by section 44(c),
it must have been made to enable an eligible small business to
comply with the applicable requirements under the ADA”. Id. (and
cases cited thereat).
We summarized in Arevalo as follows:
any person who owns, leases, leases to, or operates a
public accommodation is required to make modifications
for disabled individuals in order to comply with the
requirements set forth in ADA title III. While ADA
title III does not define the terms “own”, “lease”,
“lease to”, or “operate”, we must construe those terms
in accord with their ordinary and natural meaning.
See, e.g., Smith v. United States, 508 U.S. 223, 228
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