108 T.C. No. 15
UNITED STATES TAX COURT
NORWEST CORPORATION AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 20567-93, 26213-93. Filed April 28, 1997.
I.
Norwest Bank Nebraska, N.A., a subsidiary of
petitioner, removed asbestos-containing materials from
its Douglas Street building in connection with the
building's renovation and remodeling. On its 1989
return, petitioner claimed a $902,206 ordinary and
necessary business deduction with respect to the
asbestos-removal expenditures. In the notice of
deficiency, respondent disallowed the deduction.
Held: The costs of removing the asbestos-containing
materials must be capitalized because they were part of
a general plan of rehabilitation and renovation that
improved the Douglas Street building.
II.
Petitioner's subsidiary Norwest Bank Minneapolis
(NBM) owned "blocked deposits" at the Central Bank of
Brazil (Central Bank) consisting of principal repayments
of dollar-denominated loans previously made to Brazil in
the ordinary course of NBM's banking business. The
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