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that expense. A. E. Staley Manufacturing Co. v. Commissioner,
supra at 195.
Petitioners contend that their land development activities
did not change the physical characteristics of the land itself
nor did they affect title and that, therefore, there were no
"improvements or betterments" to the land. Petitioners also
maintain that they did not have a vested interest in the zoning
change during the years at issue and would not acquire such an
interest until a land-use permit was granted; consequently, they
argue, their activities did not lead to a "permanent" change
during the years at issue, which, as petitioners interpret
section 263(a)(1), is required for capitalization.
While physical alterations, e.g., construction, or actions
affecting title, may be sufficient conditions to classify an
expense as capital, they are not necessary conditions. INDOPCO,
Inc. v. Commissioner, supra at 86-87; Commissioner v. Lincoln
Savings & Loan Association, 403 U.S. 345, 358 (1971) ("� 263 does
not provide a complete list of nondeductible expenditures"). Nor
does section 263(a)(1) require that the change for which the
funds were expended be completed or vested within a specific tax
year for that change to be permanent within the meaning of that
section.
The foregoing principles have been applied in a number of
cases where expenditures in efforts to obtain changes in land
zoning have been required to be capitalized. Godfrey v.
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