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property used in business or property held for the production of
income. However, land generally is not depreciable because it
has no limited useful life and is not subject to exhaustion or
obsolescence. Bender v. United States, 383 F.2d 656, 659 (6th
Cir. 1967); sec. 1.167(a)-2, Income Tax Regs.
In addition, a taxpayer’s cost of obtaining a zoning change
for that taxpayer’s land must be capitalized and is not
depreciable if the benefits resulting from the zoning change are
indefinite and undeterminable in duration. Galt v.
Commissioner, 19 T.C. 892, 910 (1953), revd. in part and affd.
in part on other issues 216 F.2d 41 (7th Cir. 1954); see Oliver
v. Commissioner, T.C. Memo. 1976-145, affd. 553 F.2d 560 (8th
Cir. 1977); Ackerman Buick, Inc. v. Commissioner, T.C. Memo.
1973-224.
C. The Expert Testimony
Petitioners and respondent offered expert testimony. The
reports prepared by petitioners’ expert and respondent’s expert
were admitted in evidence as their direct testimony. We may
reject the testimony of an expert witness, in whole or in part,
in the exercise of our sound judgment. Helvering v. Natl.
Grocery Co., 304 U.S. 282, 295 (1938); In re Estate of Williams,
256 F.2d 217, 219 (9th Cir. 1958), affg. T.C. Memo. 1956-239.
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