Blakeney, et al. v. Comr., T.C. Memo. 2012-289

(petitioner bought yacht for his charter fishing company operating in the Gulf Opportunity Zone area in Alabama; petitioner took delivery of yacht in Florida (outside of the GO Zone) and, due to various problems, it took almost a year to get the yacht to petitioner’s business site in AL; yacht chartered for 43 days in non-GO Zone waters while enroute to AL and remained available for charter for 74 days during tax year once in GO Zone; petitioner claimed 50 percent bonus depreciation  (for property purchased, placed in service and used in a trade or business substantially all of which is conducted in Go Zone) on basis that use outside of GO Zone was at time when yacht not in business use; IRS disagreed citing Notice 2006-77 which specified that “substantially all” meant 80 percent or more of use had to be in Go Zone; while court upheld IRS position on basis that 43 days of charter outside of GO Zone of 117 total constituted substantial non-GO Zone use, court stated that IRS Notices do not have force of law and are not entitled to Chevron deference).