- 14 - improvements and repairs to the same specific asset, usually a structure in a state of disrepair." Moss v. Commissioner, supra at 839 (fn. ref. omitted). In Kaonis v. Commissioner, T.C. Memo. 1978-184, affd. without published opinion 639 F.2d 788 (9th Cir. 1981), we separated capital expenditures from repairs and allowed the taxpayer a deduction for the repairs to a rental house. Specifically, we found that the taxpayer's expenses for painting and cleaning restored the property to its previous condition and thus were deductible. We declined to apply the rehabilitation doctrine because "the property was tenantable and generally suitable for its use in the trade or business." Id. Here, likewise, the two barns and the granary were suitable for use in petitioner's trade or business prior to the repairs; they had been used by petitioner for over 10 years. Respondent points out that the repairs to the Rhodes barn increased its capacity to store hay. In Keller Street Dev. Co. v. Commissioner, 37 T.C. 559 (1961), affd. in part and revd. in part on other grounds 323 F.2d 166 (9th Cir. 1963), the taxpayer, a brewery, made some capital improvements to its plant and equipment. Most of the improvements were designed to increase productive capacity so that the brewery could fill increasing demand. The Commissioner argued that certain expenses deducted by the taxpayer should have been capitalized because they were "part of a general betterment program". Id. at 567. However, wePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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