Rink v. Comm’r of Internal Revenue

Full title: Thomas C. RINK and Alison W. Rink, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.

Court: United States Tax Court

Date published: Apr 7, 1993

Facts

Petitioner Thomas C. Rink is an experienced tax attorney. In 1980, Mr. Rink began advising Moore, Owen, Thomas & Co. (Moore), an equipment-leasing company, on legal and tax matters.

On December 30, 1980, Mr. Rink purchased three lawn service trucks from Moore. Mr. Rink’s trucks were subject to a prior lease, running from November 14, 1980, through December 31, 1988, between Moore, as lessor, and Chemlawn Corp. (Chemlawn), as lessee. Mr. Rink assumed a zero salvage value for the trucks and claimed depreciation deductions that exhausted the full basis over the taxable years 1980, 1981, 1982, and 1983. Several other investors, including Charles G. Atkins, also purchased lawn service trucks from Moore and calculated depreciation based on a zero salvage value estimate.

Respondent issued statutory notices to petitioners and the other investors based upon a determination that the lawn service trucks had substantial salvage value. In 1986, several of the investors, including Mr. Rink and Mr. Atkins, filed petitions with this Court challenging the respondent’s determinations. Mr. Rink represented Mr. Atkins and some of the other taxpayers in those proceedings. In December 1986, Mr. Rink and Ms. Sherri L. Feuer, senior attorney for the respondent, began to negotiate a settlement that was to include a closing agreement regarding allowable depreciation deductions on the trucks owned by Mr. Atkins. The negotiations continued until October 1987.

Issue

Decision

Based on the foregoing, we hold that petitioners are not entitled to additional depreciation deductions in 1986.

The decision will be entered under Rule 155. Tax Court, 1993.

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