Helen Sophie Schroeder - Page 14

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          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, we                  




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