Poly Holding Corp. v. Commissioner
United States Board of Tax Appeals
Petitioner acquired a lease of land having a term of 21 years and the privilege of renewal, and erected thereon a building at its expense, which the respondent determined had a useful life of 40 years, and allowed depreciation deductions at the rate of 2 1/2 percent per annum.
Read the full summary
Petitioner acquired a lease of land having a term of 21 years and the privilege of renewal, and erected thereon a building at its expense, which the respondent determined had a useful life of 40 years, and allowed depreciation deductions at the rate of 2 1/2 percent per annum. Held, following 353 Lexington Avenue Corp.,27 B.T.A. 762, that the respondent's determination must be sustained in the absence of evidence that the probable useful life of the building to petitioner was shorter than the period determined by the respondent.
1Opinion of the Court
*912OPINION.
Arundedl :
The only question here is the amount of the deduction to be allowed to petitioner for depreciation of the building erected at its expense on leased premises. Section 23 (k) of the Revenue Act of 1928 provides for a reasonable allowance for exhaustion, wear and tear of property used in a trade or business, including a reasonable allowance for obsolescence. On petitioner’s leasehold it has erected a building at a cost of $235,000 and it maintains the right to exhaust its cost over the original term of the lease, a period of 21 years, without regard to the life of the building,…
2Cases cited3 opinions
- Gladding Dry Goods Co. v. CommissionerUnited States Board of Tax Appeals · 1925
- 719 Fifth Ave. Co. v. CommissionerUnited States Board of Tax Appeals · 1926
- 353 Lexington Ave. Corp. v. CommissionerUnited States Board of Tax Appeals · 1933
3Cited by1 opinion
- Poly Holding Corp. v. CommissionerUnited States Board of Tax Appeals · 1934