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The proposal was for the entire builtup roof, which represents
the top flat portion of the roof; the proposal did not cover any
work on the tile portion of the roof which bordered the builtup
roof, the plywood deck beneath the builtup roof, or the
supporting structures. In June 1993, petitioner paid
Gudgel/Yancey Roofing $63,000 for this work. Mr. Graham
inspected the completed work, which had a warranty of 10 years.
On his 1993 return, petitioner claimed a deduction for
repairs to Cirby/Sunrise of $41,530. Respondent disallowed
$31,5003 of this deduction and determined that this amount is a
capital expenditure.
Carmichael Village Shopping Center Roof
In addition, petitioner contacted Mr. Graham because the
roof above 12 suites at the Carmichael Village Shopping Center
(Carmichael Village) was leaking.4 Mr. Graham determined that
the contractor that put on the original roof had done a poor job,
and he decided to tear off the original roof and put on a new
roof. In August 1994, petitioner received a proposal from
Gudgel/Yancey Roofing to perform work on this roof. The work
detailed in this proposal mirrored the proposal on Cirby/Sunrise
except that the roof jacks would be replaced, as necessary, and
3 The amount of $31,500 represented petitioner’s 50-percent
interest in the shopping center.
4 Suites 1 through 12 comprised about 10 percent of the
entire shopping center.
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Last modified: May 25, 2011