Dennis L. and Sharon E. Hayden v. Commissioner

112 T.C. No. 11

UNITED STATES TAX COURT DENNIS L. HAYDEN AND SHARON E. HAYDEN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 590-98. Filed March 19, 1999. Ps are the sole partners in L. During 1994, L expended $26,650 on sec. 179 property and elected to expense $17,500 of that amount. Without regard to this deduction, L had no taxable income for the 1994 taxable year. The deduction under sec. 179 flowed through to Ps' 1994 return. Sec. 1.179-2(c)(2), Income Tax Regs., provides that a "partnership may not allocate to its partners as a sec. 179 expense deduction for any…