Leo and Evelyn Trentadue - Page 4

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          Petitioners use the head pruning method for their Carignane,                
          Zinfandel, and Petite Syrah grapevines and trellising for the               
               During 1999 and 2000, petitioners’ son, Victor Trentadue               
          (Victor), managed petitioners’ vineyard operations, including the           
          growing of grapes, and he also managed Trentadue Winery,                    
          petitioners’ separate business for making wine.  Victor also                
          owned his own business called Four Seasons Vineyard Management              
          Co., which installed, maintained, and removed grapevines,                   
          trellises and irrigation systems.                                           
               Petitioners attached to their 1999 and 2000 Joint Federal              
          Income Tax Returns, a Schedule F, Profit or Loss From Farming, on           
          which they claimed depreciation deductions for, among other                 
          items, the trellis components, trellis systems, irrigation                  
          systems, and the well.  With respect to the above-listed                    
          property, depreciation deductions were calculated using a 10-year           
          class life, which includes 7- to 10-year recovery periods.                  
               In the notice of deficiency, respondent determined that the            
          recovery period for each of these properties was 15 years, which            
          would place them in the 20-year class life, which includes 15- to           
          20-years class lives.                                                       
               Trellising is a method of training vines used in the                   
          production of wine grapes.  The primary components of a trellis             

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Last modified: November 10, 2007