Barbara A. Trimble-Gee - Page 6




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          address only whether the expenses were ordinary and necessary,              
          and whether they were paid or incurred in connection with the               
          business.                                                                   
               A.   Depreciation and Section 179 Expense                              
               For 2001, petitioner made an election under section 179 to             
          expense a portion of the cost of the Astro Van.  Petitioner                 
          claimed a $17,886 deduction, representing a business usage of               
          63.88 percent multiplied by a reported total cost of $28,000.3              
          Respondent determined that petitioner was not eligible to make              
          the election.  Respondent instead allowed petitioner a                      
          depreciation deduction of $1,071 and disallowed the remaining               
          $16,815 claimed on Schedule C.                                              
               For 2002, petitioner claimed depreciation and section 179              
          expense of $5,378.  Respondent allowed petitioner a deduction of            
          $2,401 for depreciation expense and disallowed the remaining                
          $2,977.                                                                     
               In general, a taxpayer is allowed as a depreciation                    
          deduction a reasonable allowance for the exhaustion, and wear and           
          tear of property used in a trade or business.  Sec. 167(a).                 
          Under section 179, a taxpayer may elect to expense the cost of              
          certain property rather than capitalizing and depreciating the              
          cost over time.  See sec. 179(a); Govier v. Commissioner, T.C.              

               3 The parties stipulated that the cost of the Astro Van                
          after rebate was $25,379.  Petitioner did not explain why she               
          calculated the sec. 179 deduction based on a cost of $28,000.               






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