Thomas J. Northen , Jr., and Shirley Cox - Page 4

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          coming through, almost like a river.”                                       
               Twenty eight sheets of plywood on the roof were replaced due           
          to dry rot.  The superintendent explained that it was not                   
          necessary to remove the tar and gravel from the roof.  However,             
          Armstrong’s company policy was to remove all tar and gravel down            
          to the plywood roof, spray the primer on, and top it off with a             
          spray polyurethane foam coating.  There were no structural                  
          changes made to the roof.  The entire roof was sprayed to protect           
          Armstrong against any potential liability in the future.                    
               The leaks were located under the rooftop air conditioning              
          unit.  In order to gain access to that area and stop the leaks,             
          petitioner’s contractors had to move and replace the air                    
          conditioner with a crane, place supports under the air                      
          conditioner when it was replaced, disconnect and reconnect the              
          gas lines, and install new electrical conduits.                             
               Respondent disallowed a repair expense deduction of $52,880,           
          allowed a $656 depreciation deduction, and made an automatic                
          adjustment.  Respondent determined that $3,572 of the $52,880 had           
          not been substantiated and that the remaining $49,308 was a                 
          capital expenditure.  At trial, petitioner did not address the              
          substantiation issue, and on brief petitioner conceded this                 
          issue.                                                                      
               Petitioner claims that the roof-covering expense incurred is           
          a deductible expense; respondent argues that it is a capital                






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