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Commissioner, 335 F.2d 82, 84-85 (6th Cir. 1964) (where the
efforts were unsuccessful but the expenditures were held not to
be deductible, the court stating: "The purpose of the
expenditure was to create a permanent benefit. The fact that it
created neither a permanent nor exhaustible benefit does not
change its character."); Soelling v. Commissioner, 70 T.C. 1052,
1055-1056 (1978); Galt v. Commissioner, 19 T.C. 892, 910 (1953),
affd. in part and modified on other issues 216 F.2d 41 (7th Cir.
1954).5
Most of petitioners' disputed Schedule C expenses, including
office supplies and depreciation of their computer, arose out of
their activities to change the zoning and enhance the value of
their undeveloped land. The very purpose of their business was
to conduct these activities. Indeed, petitioners stipulated
without qualification that "The expenses [Schedule C] were
directly related to petitioners' attempts to improve the value of
the land." The benefit to petitioners' land from rezoning is one
which inures beyond the year of the expenditures. Income will be
realized from petitioners' activities when, and not until, the
property is sold. Capitalization of petitioners' Schedule C
expenses leads to a closer matching of expenses with income. See
INDOPCO, Inc. v. Commissioner, supra at 84, where the Supreme
Court emphasized the importance of such matching principle.
5 See also Davis v. Commissioner, T.C. Memo. 1983-160;
Ackerman Buick, Inc. v. Commissioner, T.C. Memo. 1973-224.
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