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to purchase pipe for fencing that surrounded the entire 80-acre
parcel. The cost of the fencing pipe was capitalized and placed
on Flair Racing’s depreciation schedules. Various other
deductions were claimed by Flair Racing for repair work performed
on the Legends race cars, insurance premiums on each of the
Legends race cars, and other expenses during the years in issue.
Depreciation and Other Expenses Claimed by Flair Enterprises
During the years in issue, petitioners made substantial
improvements to their land, including cleaning and repairing
erosion from the preexisting pond located on the tract, preparing
the land for construction of three homes for petitioners and
their two sons, installing driveways on the land, and
constructing the race shop. In 2000, Flair Enterprises purchased
heavy construction equipment totaling approximately $142,420 and
including bulldozers, dump trucks, track hoes, road graders, and
brush hog mowers. All of these items were depreciated by Flair
Enterprises. Flair Enterprises also claimed a $20,000 section
179 deduction for the taxable year 2000 related to the
acquisition of a tractor and loader. The construction equipment
acquired in 2000 was purchased in anticipation of petitioners’
purchase of the 80-acre tract and was used almost exclusively on
the tract, where it was also stored. Prior to 2000, the only
heavy equipment used at Flair Body Works locations included a
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Last modified: November 10, 2007