- 21 - cleaning devices, in addition to increasing the safety of its employees. See id. On the facts of this case, we hold that Vanalco must capitalize the costs of replacing the brick floors of its cell rooms with Fondag cement. The Plant Roof The plant roof is 122,567 square feet. During the period 1989 through 1994, Vanalco removed and replaced 42,514 square feet of roof decking and 78,197 square feet of roofing material. In 1992, Vanalco removed and replaced 12,927 square feet of roof decking and roofing material. Petitioner argues that the replacement of the portion of the roof in the year at issue was only to repair a leak and not part of a plan of rehabilitation. Respondent argues that the roof repair was more than patching a few leaks, and that when this repair is considered with the roof repairs performed in 1989 through 1994, it is evident that Vanalco had a plan to replace most of its roof over a period of years. Expenses incurred as part of a general plan of rehabilitation, modernization, or improvement must be capitalized even though the same expenses if incurred separately would be deductible as ordinary and necessary. See United States v. Wehrli, 400 F.2d at 689; Norwest Corp. & Subs. v. Commissioner, 108 T.C. at 280. An asset need not be completely out of servicePage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011