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further indication of petitioners’ attempts to portray falsely
Flair Racing as an active business operation.
Petitioners claimed depreciation deductions for several
pieces of heavy construction equipment acquired during the years
in issue. However, petitioners have not presented any evidence
of the business purpose of most of these items. Petitioners have
presented some evidence with regard to a tractor and loader
purchase to substantiate a $20,000 section 179 deduction claimed
in 2000 by the company. Respondent maintains that the tractor
was purchased as a personal asset for use on petitioners’ 80-acre
tract. Petitioners maintain that the tractor and loader were
used to remove ice and snow from the Flair Body Works locations
and to move wrecked vehicles. Petitioner testified, however,
that the equipment acquired in 2000 was purchased in anticipation
of buying the 80-acre tract, and it was stored at the tract, not
at the business locations. He also testified that he thought the
equipment was being depreciated on the schedules for Flair
Racing. We conclude that petitioners have failed to establish
that the tractor is a business asset, and Flair Enterprises is
not entitled to a section 179 deduction for the purchase of the
tractor in 2000.
Petitioners have not contested, and have thus conceded,
respondent’s disallowance of deductions from Flair Enterprises’
income for various personal expenses of petitioners or for
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Last modified: November 10, 2007