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it was in when first delivered to Perl's, would cost $6,500.
Respondent determined that the 1989 Porsche auto invoices in the
amount of $7,311, and, for 1990, $3,937 of the $5,107 claimed
expenses, should be capitalized.
In our judgment, the expenditures represent amounts expended
in restoring property which are required to be capitalized under
section 263(a)(2). The regulations explain that amounts that are
paid or incurred to add to the value of property or to
substantially prolong its useful life may not be deducted, but
must be treated as a capital expenditure. They are to be
distinguished from amounts paid or incurred for incidental
repairs and maintenance of property. Sec. 1.263(a)-1(a) and (b),
Income Tax Regs.; cf. sec. 1.162-4, Income Tax Regs. In Clark v.
Commissioner, T.C. Memo. 1969-241, we held that the cost of
reconditioning a nine-year-old pickup truck added to the value of
the pickup and appreciably prolonged its life; the cost was
therefore required to be capitalized. The same rationale applies
here.
For 1989, respondent disallowed the entire $1,950
expenditure for parking. We agree with the disallowance, since
petitioner failed to show that any part of the cost of parking
was not a nondeductible commuting expense. See Walker v.
Commissioner, 101 T.C. 537, 545 (1993); secs. 1.262-1(b)(5),
1.162-2(e), Income Tax Regs.
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