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6. Office Rent
Dr. Rinker testified that she paid office rent to two
different sublessors in 1999. She estimated that she paid the
first of those sublessors between $790 and $800 a month from
January through September 1999, and that she paid the second
sublessor between $800 and $1,000 per month for the rest of 1999.
Office rent is a deductible expense. Sec. 162(a)(3). Under
Cohan, we allow a deduction of $9,600.
7. Repairs
Dr. Rinker testified about two expenditures for alleged
repairs she incurred in maintaining her medical office in 1999.
Dr. Rinker hired a technician two times to fix her office
computers in 1999, paying approximately $400 for each visit.
Also, Dr. Rinker hired Levi Moore, a builder, to construct
countertops and cupboards in her office. Dr. Rinker testified
that the construction work cost $2,500.
Petitioners argue that payments to Levi Moore for the
construction of countertops and cupboards in Dr. Rinker’s office
are deductible expenses. That argument is incorrect. Generally,
under section 263, no deduction is allowed for capital
expenditures. Capital expenditures include any amount paid for
permanent improvements or betterments made to increase the value
of any property. Sec. 263(a)(1). Particularly, the cost of
constructing furniture and fixtures or similar property having a
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