Fort Wharf Ice Co. v. Commissioner

OPINION.

Van Fossan, Judge:

The issue presented is whether petitioner is entitled to amortize the cost of buildings and machinery over the 10-year period of its lease, or whether it is entitled only to depreciation over the useful life of its assets. Statutory authority for these deductions is contained in section 23 (a) (1) (A) and (1) (1), Internal Revenue Code of 1939.2

Ordinarily a taxpayer who makes improvements of a capital nature on property that is used in his trade or business is allowed a deduction for depreciation based on the useful life of the improvements. As an exception to this…