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amounts. Petitioner also produced 2001 personal bank account
statements for an account with Auto Worker’s Credit Union in the
name of his mother, Marie J. Vignovich, and on which petitioner
had signatory authority. Petitioner did not provide any
documentation with respect to the medical equipment.
OPINION
I. Medical Equipment
Petitioner contends he purchased the medical equipment from
Dr. Karason in 2001 and leased it back to KCPI in 2001 along with
other medical equipment as part of his medical equipment rental
business. Thus, he asserts he is entitled to expense $24,000 of
the cost of the medical equipment purchased in 2001 pursuant to
section 179 and depreciate the remaining amount pursuant to
section 167, and that he is entitled to section 167 depreciation
deductions for previously purchased medical equipment.
Section 179 allows a taxpayer to elect to treat the cost of
section 179 property as a current expense in the year such
property is placed in service, within certain dollar limitations.
Sec. 179(a) and (b). To substantiate this expense, the taxpayer
must maintain records which specifically identify each item of
section 179 property and reflect how and from whom such property
was acquired and when such property was placed in service. See
sec. 1.179-5(a), Income Tax Regs. Section 179 property is
defined as property acquired by purchase for use in the active
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Last modified: November 10, 2007