Nielsen v. Commissioner of Internal Revenue, 050817 FEDTAX, 20050-15S

Docket Nº:20050-15S
Opinion Judge:CARLUZZO, Special Trial Judge.
Party Name:SHARON M. NIELSEN AND STEVE L. NIELSEN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Attorney:Sharon M. Nielsen and Steve L. Nielsen, pro se. Mark A. Nelson, for respondent.
Case Date:May 08, 2017
Court:United States Tax Court
 
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T.C. Summary Opinion 2017-31

SHARON M. NIELSEN AND STEVE L. NIELSEN, Petitioners

v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

No. 20050-15S

United States Tax Court

May 8, 2017

NOT PRECEDENTIAL

Sharon M. Nielsen and Steve L. Nielsen, pro se.

Mark A. Nelson, for respondent.

SUMMARY OPINION

CARLUZZO, Special Trial Judge.

This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code in effect when the petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not reviewable by any other court, and this opinion shall not be treated as precedent for any other case.

In a notice of deficiency dated May 14, 2015 (notice), respondent determined a $5, 297 deficiency in petitioners' 2012 Federal income tax. The issue for decision is whether petitioners are entitled to a depreciation deduction in an amount greater than respondent allowed.

Background

Some of the facts have been stipulated and are so found. At the time the petition was filed, petitioners resided in California.

Petitioners owned several rental real estate properties (rental properties) in 2012 in Whittier, California: 7756/7758/7760 Newlin Ave. (7756 Newlin property); 13451 A:F Camilla St. (Camilla property); and 6522-6524 Newlin Ave. (6522 Newlin property).

Mr. Nielsen purchased the 7756 Newlin property for $360, 000 in 2003. At the time there were three buildings erected on it. In 2012 the Los Angeles County Office of the Assessor assessed the 7756 Newlin property at a value of $425, 324, of which amount $189, 032 was attributable to improvements and $236, 292 was attributable to land. Simple mathematics shows that according to the tax assessor's office, the value of the improvements constituted 44.4% of the total value of the property.

Petitioners purchased the Camilla property for $750, 000 in 2003. At the time there were four buildings erected on it. In 2003 Hawthorne Savings (Hawthorne) performed a professional appraisal of the Camilla property and determined a value of $750, 000, attributing $255, 486 to improvements and the balance to land. In 2012 the Los Angeles County Office of the Assessor assessed the Camilla property at a value of $795, 000, of which amount $305, 800 was attributable to improvements and $489, 200 was attributable to land. According to the Hawthorne appraisal the improvements constituted 34% of the total value of the property; according to the tax assessor's office, the value of the improvements constituted 38.4% of the total value of the property.

Petitioners purchased the 6522 Newlin property for $520, 000 in 2011. At the time there were two buildings erected on it. In 2013 the Los Angeles County Office of the Assessor assessed the 6522 Newlin property at a value of $532, 807, of which amount $163, 940 was attributable to improvements and $368, 867 was attributable to...

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