James M. and Ruth J. Riley - Page 20

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               Petitioners ask us to agree with their estimate of the                 
          values of the improvements and land at the time of purchase.                
          However, they offered only the vaguest estimates of the values of           
          the improvements on the farms.  It is not appropriate under Cohan           
          for us to guess the allowable amounts of depreciation.  See,                
          e.g., Shaw v. Commissioner, T.C. Memo. 2003-111.  We decline to             
          do so.  Consequently, we hold that petitioners have failed to               
          substantiate their bases in the buildings.                                  
               2.   Depreciation of Truck                                             
               On the 2001 return, petitioners claimed a $7,000                       
          depreciation deduction for the truck, depreciating the $35,000              
          cost of the truck over 5 years using the straight-line method.              
          On the 2002 return, petitioners attempted to elect to expense               
          $24,000 of the cost of the truck under section 179.  On the 2002            
          return, they deducted the $24,000 expensed amount plus $1,000 of            
          depreciation for the truck.  On the 2003 return, petitioners                
          deducted $1,000 of depreciation for the truck.  Respondent                  
          disallowed all of those deductions.                                         
               Respondent concedes that the truck was placed in service on            
          January 1, 2001, and was used solely for business purposes.                 
          Respondent also concedes that petitioners are entitled to a                 
          $7,000 deduction for depreciation of the truck for 2001, 2002,              
          and 2003 but asserts that petitioners may not elect to expense              
          $24,000 of the cost of the truck for 2002.                                  






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