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supra, involved an interpretation of section 162 and section
1.162-12(a), Income Tax Regs., concerning a farmer/taxpayer’s
ability to make or change an election to either deduct or
capitalize maintenance expenses in connection with preproductive
fruit and nut trees. The regulation was interpreted by this
Court to permit a farmer/taxpayer to choose to capitalize some
and deduct some expenditures in the same taxable period.
Further, it was held that a taxpayer may not be required to
capitalize certain expenditures that were inadvertently not
included with related expenditures that had been capitalized.
See Wilbur v. Commissioner, supra at 326. It was also held that
with respect to the expenditures that were capitalized, the
election was irrevocable.
In the setting of this case, section 263A governs whether or
not the corporation is required to capitalize the costs incurred
in connection with the citrus trees. In the context of section
263A, the corporation did not have the choice to capitalize or
deduct due to the prohibition contained in section 263A(d)(3)(C).
The choice not to deduct was based on the self-conceived
predicate that the question of whether the outlays were
deductible could not be determined until it was known whether the
trees had a preproductive period of 2 years or less under section
263A(d)(1)(A)(ii). As discussed above, the statute did not offer
that choice. By not deducting the costs for 1989 and 1990, the
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