Illinois Merchants Trust Co. v. Commissioner
United States Board of Tax Appeals
1. In 1919 the water level in the Chicago River suddenly and unexpectedly receded and thus exposed part of the foundation piles under the decedent's building. These piles immediately started to rot, which caused the wall on the river side to settle to such extent that the collapse of the building threatened.
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1. In 1919 the water level in the Chicago River suddenly and unexpectedly receded and thus exposed part of the foundation piles under the decedent's building. These piles immediately started to rot, which caused the wall on the river side to settle to such extent that the collapse of the building threatened. The cost of shoring up the wall and repairing the foundation was a proper deduction from gross income under section 214(a)(1), Revenue Act of 1918. 2. The decedent's business had no good will value on March 1, 1913.
1Opinion of the Court
*105OPINION.
MoRRis:
The taxpayer claims the sums expended on the building are deductible, under section 214 (a) (1) of the Revenue Act of 1918, as ordinary and necessary expenses of carrying on business. The Commissioner contends that they are capital expenditures and therefore not deductible. In support of their contrary contentions *106both parties rely on article 108 of Regulations 45, which reads as follows:
The cost of incidental repairs which neither materially add to the value of the property nor appreciably prolong its Ufe, but keep it in an ordinarily efficient operating condition, may be…
2Cases cited1 opinion
- Union Pacific Railroad v. United StatesSupreme Court of the United States · 1879
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- Denver & Rio Grande Western Railroad Company v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1960
- Joseph Merrick Jones and Eugenie Penick Jones v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1957
- Wolfsen Land & Cattle Co. v. CommissionerUnited States Tax Court · 1979
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