Ocrant v. Commissioner
United States Tax Court
Held: Depreciation deductions to be claimed for a short taxable year may be computed pursuant to the "averaging convention" authorized by sec. 1.167(a)-10(b), Income Tax Regs., at one-half the rate applicable for the short taxable year. The depreciation deduction is not intended to reflect the decline in the fair market value of an asset, but to enable its owner to charge its cost off over its useful life.
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Held: Depreciation deductions to be claimed for a short taxable year may be computed pursuant to the "averaging convention" authorized by sec. 1.167(a)-10(b), Income Tax Regs., at one-half the rate applicable for the short taxable year. The depreciation deduction is not intended to reflect the decline in the fair market value of an asset, but to enable its owner to charge its cost off over its useful life. Held, an investment credit could not be claimed with respect to certain assets where petitioners failed to prove that the assets were not used by the same parties before and after they were…
1Opinion of the Court
OPINION
The venture was organized on December 1,1968, and began to acquire oil field completion equipment, most of which was already in use when the venture acquired it. On the U.S. partnership return of income which it filed for 1968, the venture claimed a full 6 months of depreciation on the equipment which it acquired during that year. Petitioners contend that the venture was authorized to do so under the “averaging convention.” Respondent contends that the venture was entitled to claim no more than 1 month’s depreciation on that equipment. In our opinion petitioners’ contention is based on…
2Cases cited5 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Coca-Cola Bottling Co. v. United StatesUnited States Court of Claims · 1973
- Scovill Mfg. Co. v. CommissionerUnited States Board of Tax Appeals · 1932
- Estate of Roodner v. CommissionerUnited States Tax Court · 1975
- Hillyer, Deutsch, Edwards, Inc. v. CommissionerUnited States Board of Tax Appeals · 1930
3Cited by4 opinions
- Greenbaum v. CommissionerUnited States Tax Court · 1987
- Ocrant v. CommissionerUnited States Tax Court · 1976
- Schlang v. CommissionerUnited States Tax Court · 1992
- Travis v. CommissionerUnited States Tax Court · 1980