Simmons & Hammond Mfg. Co. v. Commissioner
United States Board of Tax Appeals
1. Expenses properly chargeable to capital account include those which are incurred in the original construction of the work and in the subsequent enlargement and improvement thereof. 2. Taxpayer purchased all the shares of its issued and outstanding stock held by three of its stockholders. It then resold these shares, so purchased, to two others of its stockholders at a price which was less than half of the price it had paid for them.
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1. Expenses properly chargeable to capital account include those which are incurred in the original construction of the work and in the subsequent enlargement and improvement thereof. 2. Taxpayer purchased all the shares of its issued and outstanding stock held by three of its stockholders. It then resold these shares, so purchased, to two others of its stockholders at a price which was less than half of the price it had paid for them. Held, this was a capital transaction and did not result in a realized loss to the taxpayer.
1Opinion of the Court
*806OPINION.
Koener : The record in this appeal clearly warrants the conclusion that the items $3,804.68 and $627.78, expended in 1918 and 1919, respectively, were for improvements and betterments to leased properties and as such constitute capital expenditures which should be charged off ratably over the life of the lease. Appeal of National City Bank of Seattle, 1 B. T. A. 139.
The Supreme Court of the United States has made it clear that expenditures for additions and betterments are properly chargeable to capital account. In Illinois Central R. R. Co. v. Interstate Commerce Commission, 206 U.…
2Cases cited3 opinions
- Illinois Central Railroad v. Interstate Commerce CommissionSupreme Court of the United States · 1907
- Union Pacific Railroad v. United StatesSupreme Court of the United States · 1879
- Central R. v. DuffyCourt of Appeals for the Third Circuit · 1923
3Cited by20 opinions
- RJ Reynolds Tobacco Co. v. Commissioner of Int. Rev.Court of Appeals for the Fourth Circuit · 1938
- Ohio Central Telephone Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Lynch v. CommissionerUnited States Tax Court · 1983
- Ohio Cent. Tel. Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Apollo Steel Co. v. CommissionerUnited States Tax Court · 1945
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