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uphold respondent’s determination disallowing the entire $34,246
deduction.
D. Solarium (“Small Tools” Expense)
Holland America spent $12,203 to construct a new solarium
attached to the Dobbe residence and deducted the entire cost of
the new solarium as a “small tools” expense. Petitioners argue
that the new solarium was used solely for business purposes in
the year the deduction was taken and that Holland America greatly
benefited from the construction of the new solarium because the
expense enabled it to experiment with and develop a new product,
the medicinal herb Echinacea. Thus, petitioners contend, the
expense properly was deductible under section 162(a) or, in the
alternative, the new solarium was deductible as an experimental
procedure under section 174(a). Respondent contends the new
solarium benefited Mr. and Mrs. Dobbe personally and added value
to their home; therefore, the new solarium was primarily a
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