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a. Maintenance and Repair, Remodeling, and
Landscaping
Necessary expenses incurred to maintain property used in a
trade or business in efficient operating condition ordinarily are
deductible. Sec. 162(a); Jacks v. Commissioner, T.C. Memo.
1988-237; Gilles Frozen Custard, Inc. v. Commissioner, T.C. Memo.
1970-73. Likewise, the cost of repairs “which neither materially
add to the value of the property nor appreciably prolong its
life, but keep it in an ordinarily efficient operating condition,
may be deducted as an expense”. Sec. 1.162-4, Income Tax Regs.
Also, under appropriate circumstances, landscaping expenses may
be deductible when the expenses legitimately are connected with
the taxpayer’s trade or business and the requirements for
deductibility otherwise are met. Hefti v. Commissioner, T.C.
Memo. 1988-22, affd. 894 F.2d 1340 (8th Cir. 1989); Rhoads v.
Commissioner, T.C. Memo. 1987-335.
Dreyer Farms deducted repair and maintenance expenses of
$82 in 1996, remodeling expenses of $1,729 in 1995, and
landscaping expenses of $256 in 1995 and $216 in 1996.
Petitioners have not described or explained the maintenance and
repair, the landscaping, or the remodeling. Dreyer Farms treated
the remodeling as a repair (by deducting the cost rather than
capitalizing it), and we shall do likewise.
The farmhouse is an improvement on the leased property.
Under the terms of the farm leases, Dreyer Farms agreed to
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