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setting, those costs may have qualified for deduction under a
more general regulatory provision. Specifically, whereas section
1.162-1(a), Treasury Income Tax Regs., provides generally that
“the ordinary and necessary expenditures directly connected with
or pertaining to the taxpayer’s trade or business” are deductible
expenses, section 1.263(a)-2(a), Income Tax Regs., provides
specifically that capitalized expenditures include “The cost of
acquisition, construction, or erection of buildings, machinery
and equipment, furniture and fixtures, and similar property
having a useful life substantially beyond the taxable year.” We
disagree with petitioners when they assert that this latter
provision does not preclude explicitly ACC’s deduction of the
salaries and benefits. The installment contracts, similar to the
buildings, machinery and equipment, and furniture and fixtures
listed specifically in section 1.263(a)-2(a), Income Tax Regs.,
have anticipated useful lives extending substantially beyond the
taxable year of the related expenditures.20 We also disagree
20 Petitioners argue that the installment contracts are not
"similar" to the examples in the regulations and, hence,
expenditures connected thereto need not be capitalized. We
disagree. We understand the word “similar” to encompass any
property that, like the examples, has a useful life extending
substantially beyond the taxable year of the related expenditure.
Petitioners’ narrow interpretation of the regulations fails to
recognize that the Supreme Court has consistently taken a wider
view as to capital expenditures. See, e.g., Commissioner v.
Lincoln Sav. & Loan Association, 403 U.S. 345 (1971)
(contributions to depository reserve fund were capital
expenditures); Helvering v. Winmill, 305 U.S. 79 (1938) (taxpayer
(continued...)
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