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useful life substantially beyond the taxable year is a capital
expenditure. Sec. 1.263(a)-2(a), Income Tax Regs. Petitioners
are therefore not entitled to a deduction for payments to Levi
Moore. Petitioners have not raised--and we do not address--
whether Dr. Rinker is entitled to capitalize and depreciate the
cost of the improvements made by Levi Moore.
Petitioners also argue that payments to the computer
technician were deductible repair expenses. Under section 1.162-
4, Income Tax Regs.,
The cost of incidental 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 * * *. Repairs in the nature of replacements,
to the extent that they arrest deterioration and
appreciably prolong the life of the property, shall
either be capitalized and depreciated in accordance
with section 167 or charged against the depreciation
reserve if such an account is kept.
Petitioners have not provided the Court with sufficient
evidence to determine whether the work done by the technician
should be deducted as a current expense or capitalized into the
cost of Dr. Rinker’s office computer and depreciated. Therefore,
petitioners are not entitled to a deduction for the technician’s
fees. See Rule 142(a). Petitioners have not raised the issue of
whether they are entitled to a deduction for depreciation or
amortization with respect to the equipment. We therefore do not
address it.
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