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truthful (even if somewhat vague) in their sworn trial testimony,
notwithstanding our conclusion about the depreciation element on
their sworn tax return; and (3) we are satisfied that Maria used
depreciable property in her Avon business.
We conclude that petitioners have failed to show that they
are entitled to any of their claimed 30-percent special
depreciation. See sec. 168(k).
We conclude that petitioners have failed to show that they
have satisfied the strict substantiation requirements of section
274 as to the property subject to that section.
Doing the best we can on the basis of the record herein, we
make as close an approximation as we can, and bearing heavily
upon petitioners, whose inexactitude is of their own making, we
conclude that petitioners are entitled to deduct $100
depreciation in connection with Maria’s Avon business for 2003.
See Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930).
To take account of the foregoing,6
Decision will be entered
under Rule 155.
6 Respondent did not determine an accuracy-related penalty
under sec. 6662 in the notice of deficiency and did not assert a
claim for such a penalty at or before any hearing in this case,
and so we do not deal with that potential issue. See sec.
6214(a). Petitioners and their tax return preparer should
understand that they “dodged a bullet” with regard to the
depreciation claims on this tax return.
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