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the building shell. Mr. King said it cost about $350,000 to
repair the building and an additional $300,000 to finish it.
Petitioners testified that they had records of these
improvements, but they did not produce them or explain why they
did not. Mrs. King testified that they received an insurance
reimbursement when the building was partially destroyed, but she
did not remember the amount or the year that they received it.
Petitioners contend that their basis in the Ross Clark
building includes $350,000 in damages from the windstorm.
However, Mrs. King testified that they received an insurance
reimbursement for their expenses of repairing the partially
destroyed building shell. The cost of the building ($500,000 for
the shell and $300,000 for improvements) totals $800,000, which
is the adjusted basis respondent determined. Petitioners have
not shown that their adjusted basis exceeds this amount.
3. Whether, Under the Mitigation Provisions (Sections
1311-1314), Petitioners May Deduct More Depreciation
for the South Oates Building Than Respondent Allowed
Petitioners contend that they did not deduct all allowable
depreciation for the South Oates building from 1990-96.
Petitioners contend that, under the mitigation provisions
(sections 1311-1314), they may (1) deduct more for depreciation
for the South Oates building in 1995-96 than respondent allowed,
and (2) amend their tax returns for 1990-94 or otherwise use
their unclaimed depreciation deductions from those years.
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