James M. and Ruth J. Riley - Page 8

                                        - 7 -                                         
               Petitioners did not claim depreciation deductions for 1998             
          and 1999.  They thought they could extend the depreciation                  
          periods for the assets for 2 years.                                         
               On the Schedules F for 2001, 2002, and 2003, petitioners               
          reported depreciation and section 179 expensed amounts as                   
          follows:                                                                    



































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