- 10 -
1990) (cost of moving brewery tanks from seller's plant); Sears
Oil Co. v. Commissioner, T.C. Memo. 1965-39 (cost of transporting
barges from place of manufacture to taxpayer's place of
business). In contrast, the cost of moving property already in
use by the taxpayer may be a deductible business expense,
although the general plan of rehabilitation analysis applies to
moving as well as repair costs. True v. United States, supra at
1209 (and cases cited therein).
An important factor in determining whether the appropriate
tax treatment is immediate deduction or capitalization is the
taxpayer's realization of benefits beyond the year in which the
expenditure is incurred. INDOPCO, Inc. v. Commissioner, 503 U.S.
79, 87 (1992); United States v. Wehrli, supra at 689. This,
however, is not an absolute rule, since the benefits of
expenditures considered to be currently deductible, such as
repairs, for example, often extend beyond the current year.
United States v. Wehrli, supra. As stated previously by this
Court, "The proper test is whether the expenditure materially
enhances the value, use, life expectancy, strength, or capacity
as compared with the status of the asset prior to the condition
necessitating the expenditure." Plainfield-Union Water Co. v.
Commissioner, 39 T.C. 333, 338 (1962).
It is clear from the foregoing analysis that whether an
expenditure may be deducted or must be capitalized is a question
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011