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keep the leased property in an operating condition over its
probable useful life and not to prolong the life of the property,
increase its value, or make it adaptable to another use. Id.
There was no replacement or substitution of the roof. Id.
Here, as in Oberman Manufacturing Co., there was no
replacement or substitution of the roof. Petitioner’s only
purpose in having the work done to the roof was to prevent the
leakage and keep her commercial property in operating condition
and not to prolong the life of the property, increase its value,
or make it adaptable to another use. Petitioner’s expenditure
merely restored her commercial property to one with a roof free
of leaks. That is why she hired Armstrong and the other
contractors. The reason why Armstrong sprayed the entire roof
with foam was to protect Armstrong against future liability. On
this record, we hold that petitioner is entitled to deduct the
expenditure in issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011