Edward Atlee Howes - Page 12




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          circumstances.  See Arevalo v. Commissioner, 124 T.C. at 251-252;           
          Grodt & McKay Realty, Inc. v. Commissioner, supra at 1237.                  
               The denial of depreciation deductions in the other Alpha               
          Telcom cases has routinely been supported by the examination of             
          eight factors:  (1) Whether legal title passes; (2) the manner in           
          which the parties treat the transaction; (3) whether the                    
          purchaser acquired any equity in the property; (4) whether the              
          purchaser has any control over the property, and, if so, the                
          extent of such control; (5) whether the purchaser bears the risk            
          of loss or damage to the property; and (6) whether the purchaser            
          will receive any benefit from the operation and disposition of              
          the property.  See, e.g., Arevalo v. Commissioner, 469 F.3d at              
          439-440; Crooks v. Commissioner, 453 F.3d at 656.  Just as we               
          concluded in Arevalo and Crooks, we conclude here that the                  
          factors clearly work against petitioner and no depreciation                 
          deduction is warranted.                                                     
               The stipulation of facts and accompanying documents reveal             
          that here, as in the related litigation, Alpha Telcom was                   
          responsible for the installation, location selection, site                  
          negotiation, and maintenance of the pay telephones.  Alpha Telcom           
          bore the risk of loss if the telephones did not generate                    
          sufficient revenue because petitioner was guaranteed to be paid             
          at least $58.34 per month per pay telephone, regardless of the              
          revenues actually generated, and it was Alpha Telcom who received           
          the majority of any profit from the telephones.  Further limiting           





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