Kenneth G. Schladweiler - Page 11

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          and 1993.  Consequently, we sustain respondent’s determination as           
               Petitioner claimed repair expenses of $28,903, $41,792, and            
          $30,917 for 1992, 1993, and 1994, respectively.  In his notice of           
          deficiency, respondent determined that the claimed amounts should           
          be reduced by $8,276, $4,748, and $12,041, respectively.                    
          Of the repair expenses disallowed for 1992, $203 was                        
          disallowed for failure to substantiate either the payment of the            
          expense or its business purpose, and the balance was reclassified           
          by respondent as capital expenses.  The expenses reclassified as            
          capital expenses were for wheels and axles installed on                     
          petitioner’s dump truck and related work billed to petitioner in            
          a 1992 invoice3 totaling $10,324.  Based on petitioner’s                    
          posttrial submission, respondent has conceded that $4,143 of the            
          invoiced amount is deductible and that only $6,181 ($10,324 minus           
          $4,143) must be capitalized.                                                
          Of the amount disallowed for 1993, respondent concedes on                   
          brief that an additional $60 has been substantiated as to amount            
          and business purpose.  The balance of the adjustment is                     
          attributable to a $3,800 downpayment made by petitioner in 1993             

               3In his memorandum brief, respondent described this invoice            
          as a 1994 invoice.  Although the invoice is not in evidence, we             
          have treated respondent’s position on brief as a concession with            
          respect to 1992, and we have assumed that the invoice documented            
          1992 repairs, consistent with respondent’s position on brief.               

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