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closely held corporation. Intl. Artists, Ltd. v. Commissioner,
55 T.C. 94, 108 (1970).
The floating structures were placed in service on May 28,
1996, approximately 1 month before the end of petitioner’s FYE
June 30, 1996. The structures were under construction in 1995.
Thus, they were not used in petitioner’s trade or business during
its FY 1995. See sec. 167(a)(1). Therefore, this Court finds
petitioner is not entitled to a depreciation deduction pursuant
to section 167(a)(1) in FYE June 30, 1995.
Mr. Reeves testified that after the floating structures were
placed into service, they were used primarily by petitioner and
UMI to develop advertising for the purpose of promoting
petitioner’s skin care and suntan lotion products, nutritional
supplements, and health food products. He testified the
advertising work included photo shoots that involved people
around water; i.e., riding jet skis, skiing, or lying out in the
sun next to the river. Petitioner also indicated the property
was used for promotional events.
Neither petitioner nor Mr. Reeves kept logs of petitioner’s
or UMI’s business use of the floating structures from May 28,
1996, through FYE June 30, 1996. The only evidence petitioner
offered to establish that the floating structures were used for a
business purpose was Mr. Reeves’s testimony and several undated
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