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maintaining two pieces of machinery appears to be a large sum.
But in the context of a towboat and/or its engines, the amount is
more representative of an incidental expense. Finally, in this
case the engines are obviously being maintained in good operating
condition and are not being improved in such a manner as to
extend the life expectancy.9
We now consider whether petitioners’ maintenance procedures
materially added to the value of the towboat. Petitioners admit
that there must be some value connected with the performance of
the procedures in question. Petitioners contend that the
maintenance keeps the engines (towboat) in efficient operating
condition, but it does not adapt the engines to a new or
different use, does not extend their useful life (which is
equivalent to the life of the towboat of which they are a part),
and does not materially increase their value.
Respondent contends that the value is materially increased
and that the procedures performed are not merely incidental.
Other than labeling the value as material and noting that
petitioners expend $100,000 per towboat to perform the
procedures, respondent does not attach any particular value
increase to the performance of the procedures. As more fully
9 It would be without reason to accept the premise that an
owner of a $6.5-million piece of equipment would intentionally
fail to maintain the mechanical portion and incur a cost six
times greater than the cost of maintenance to purchase rebuilt
equipment every 3 or 4 years.
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