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those reported on its 1995 corporate income tax return. Again,
we note that Mr. Kong did not testify. We find that petitioners
failed to substantiate the claimed additional thread expenses in
1994.
3. Additional Depreciation Deductions
Petitioners argues that they are entitled to depreciation
deductions for machines that were not listed on the depreciation
schedule prepared by Kim Y. Ling, P.C. In calculating the
additional depreciation deductions, petitioners rely on the
testimony of Mr. Wen. We find that Mr. Wen testified
inconsistently with regard to his duties and responsibilities at
Sam Kong Fashions. Regarding his role in the purchase of
equipment, Mr. Wen testified that he sometimes made withdrawals
from the Corestates checking account “to buy some factory
machines, sewing machines.” However, when asked whether his
responsibilities at the corporation included paying bills, Mr.
Wen indicated that his job was “to pick up and deliver the
finished product, and do the handiwork.” With respect to the
payroll, Mr. Wen testified that he made withdrawals from the
Corestates checking account “[Sometimes] to make payrolls”, but
later testified that he was not responsible for the payroll.
Because of these inconsistences, we do not rely on Mr. Wen’s
testimony.
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