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Petitioner argues only that her adjusted basis in the truck
should be increased by $500 to reflect petitioner's payment for
the truck warranty. Petitioner argues that petitioner's $500
expenditure in 1991 resulted in the creation of an asset having a
useful life beyond the end of the 1991 taxable year. We
understand petitioner to argue that the warranty expenditure is
therefore properly chargeable to capital account, thereby
increasing petitioner's adjusted basis by $500, thereby reducing
the gain on the sale of the truck from $2,350 to $1,850.
Although this Court has recognized that warranty
expenditures that prolong the life or enhance the value of an
asset are capital in nature, see Spritzer v. Commissioner, T.C.
Memo. 1988-347 (citing Commissioner v. Lincoln Sav. & Loan
Association, 403 U.S. 345, 353 (1971) and Otis v. Commissioner,
73 T.C. 671, 674 (1980), affd. without published opinion 665 F.2d
1053 (9th Cir. 1981)), petitioner has neither entered a copy of
the warranty into evidence nor testified as to the term and
conditions of the warranty. Under these circumstances,
petitioner has failed to prove that the warranty she purchased
created an asset with a useful life that is properly chargeable
to capital account. Accordingly, we reject petitioner's argument
that her adjusted basis be increased by the $500 warranty
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