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discussed above, we do not find that the $100,000 expended was
material relative to the overall value of the towboat or the
engine, even if it were appropriate to consider the engine
separately.
More importantly, it is not clear that a buyer would pay
$100,000 more for a towboat that had just been maintained, as
opposed to one that needed maintenance. Certainly, a towboat
buyer would be more interested in a well-maintained towboat and,
in particular, one that recently had maintenance. But, on this
record, there is no accurate or reliable way to measure the
increment in value that could be attributed to how recently
maintenance had been performed. Even if $100,000 was the
increment in value, we have found that amount not to be material
in the factual context of this case.
Finally, the parties address the role, if any, that INDOPCO,
Inc. v. Commissioner, 503 U.S. 79 (1992) (INDOPCO) should play in
our consideration of this issue. Respondent references INDOPCO
along with section 1.162-4, Income Tax Regs., for the following
position:
In order to be entitled to a deduction for
the engine overhaul, petitioners must clearly
show that it is an incidental repair that
does not appreciably prolong the property’s
useful life, but keeps it in an ordinarily
efficient operating condition. * * *
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