- 12 -
for a new box for his truck; the box was not delivered or placed
in service until 1994. Petitioner has failed to prove that
respondent’s determination for 1993, as adjusted, is erroneous.
In 1994, one of petitioner’s drivers, Raymond Whitmore, was
in an accident with petitioner’s truck. The truck rolled over
and required extensive repairs. Also in 1994, petitioner paid
the balance of the cost of the new truck box ordered in 1993.
Petitioner submitted documentation to respondent of $46,067
to substantiate repair expenses of $30,917 claimed on his 1994
return. The documentation as to $1,863 of the expenses failed to
substantiate the business purpose of the expense. Of the
remaining documentation, respondent determined that $25,328 was
for capital expenditures subject to depreciation; that is, the
remaining purchase price of the box ordered in 1993 and delivered
in 1994 and the cost of repairing petitioner’s truck after the
accident.4
Petitioner offered no credible evidence to demonstrate that
respondent’s determination to capitalize the cost of the truck
box was in error. Consequently, we sustain respondent on this
part of his adjustment to petitioner’s repair expense deduction.
We reach a different conclusion regarding respondent’s
4According to respondent’s brief, the repair adjustment was
calculated as follows: $46,067 submitted, minus $1,863 not
substantiated, minus $25,328 capitalized, equals $18,876 allowed.
The $30,917 claimed on the return, minus $18,876 allowed, equals
an adjustment of $12,041.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011