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Commissioner, 180 F.2d 310 (10th Cir. 1950). They do not
specifically address the proper treatment for assets with a
useful life of less than 1 year, but the benefits of which extend
beyond the years in which the related costs are incurred. See
id.
Moreover, language used in several of these cited cases to
explain the 1-year rule is contrary to petitioner’s position.
For example, in Jack’s Cookie Co. v. United States, supra at 402,
the court stated that the 1-year rule “treats an item as either a
business expense, fully deductible in the year paid, or a capital
expenditure, which is not, depending upon whether it secures for
the taxpayer a business advantage which will be exhausted
completely within the tax year.” Similarly, the court in
American Dispenser Co. v. Commissioner, supra at 138 (quoting
Sears Oil Co. v. Commissioner, 359 F.2d 191, 197 (2d Cir. 1966)),
specified: “The test for whether an item should be treated as a
current expense or as a capital expenditure is whether the
utility of the expenditure survives the accounting period.”
Hence, the focus of the above quotations rests upon whether
the life of the contested benefit exceeds the tax year in which
it is incurred, not whether it endures beyond one 12-month
period. In other cases, again as noted by respondent, no
indication is given as to the intended meaning of the 1-year
terminology employed. See, e.g., Bilar Tool & Die Corp v.
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