Badger Pipe Line Company - Page 11

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          of fact.  INDOPCO, Inc. v. Commissioner, supra at 86; Norwest               
          Corp. v. Commissioner, supra at 280.  The distinctions between              
          current expenses and capital expenditures "are those of degree              
          and not of kind".  INDOPCO, Inc. v. Commissioner, supra at 86               
          (quoting Welch v. Helvering, 290 U.S. 111, 114 (1933)).  "Courts            
          have adopted a practical case-by-case approach in applying the              
          principles of capitalization and deductibility."  Norwest Corp.             
          v. Commissioner, supra at 280.3  In this context, we see no need            
          for us to cut through the thicket of the decided cases and                  
          detail, as the parties have sought to do, their facts and                   
          holdings in order to arrive at a decision herein.4  Rather, we              
          shall discuss the facts as reflected in the record before us and            
          arrive at a conclusion, recognizing that we shall be engaging in            
          an exercise in line drawing, a difficult task which nevertheless            
          is part of the daily grist of judicial life.  See Harrison v.               
          Schaffner, 312 U.S. 579, 583 (1941); Russell Box Co. v.                     
          Commissioner, 208 F.2d 452, 454 (1st Cir. 1953); Allen v.                   
          Commissioner, 66 T.C. 340, 346 (1976).                                      
               The parties have stipulated:  (1) The relocation was                   
          accomplished in order to permit the use of the pipeline in the              

          3  See also 1 Bittker and Lokken, Federal Taxation of                       
          Income, Estates and Gifts, sec. 20.4.8, at 20-92 (2d ed. 1989).             
          4  As the Supreme Court has observed, the cases in this area                
          "appear difficult to harmonize".  See INDOPCO, Inc. v.                      
          Commissioner, 503 U.S. 79, 86 (1992).                                       

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