Jones v. Commissioner
United States Tax Court
1. Capital Expenditure. -- The cost of replacing a gravel driveway to the taxpayers' plant with a cement driveway constituted a capital expenditure and was not a repair deductible as an expense. 2. Demolition With Intent to Replace -- Capital Expenditure. -- The remaining basis of a building which was demolished to make way for new construction is not a deductible loss but should be included in the cost of the new asset. 3. Deduction -- Business Expense. -- A machine-shop…
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1. Capital Expenditure. -- The cost of replacing a gravel driveway to the taxpayers' plant with a cement driveway constituted a capital expenditure and was not a repair deductible as an expense. 2. Demolition With Intent to Replace -- Capital Expenditure. -- The remaining basis of a building which was demolished to make way for new construction is not a deductible loss but should be included in the cost of the new asset. 3. Deduction -- Business Expense. -- A machine-shop operator on a cash basis has not proven his right to deduct as an expense of his business the cost of castings in the year…
1Opinion of the Court
OPINION.
Murdock, Judge:
The construction of the concrete driveway was not a “repair” of the old unsatisfactory driveway but was a completely new installation, a better driveway, having a greater value and having a different useful life. The cost thereof was a capital expenditure and not a deductible expense. The evidence fails to show what other construction work, if any, was done by the contractor in 1948 for the $3,000 payment; therefore the Commissioner’s failure to allow the entire amount as a deduction is sustained.
Raymond decided in 1949 to demolish a small warehouse in order to make way…
2Cases cited3 opinions
- Sanders v. CommissionerUnited States Tax Court · 1954
- Commissioner of Internal Rev. v. Appleby's EstateCourt of Appeals for the Second Circuit · 1941
- Phipps Estates v. CommissionerUnited States Tax Court · 1945
3Cited by78 opinions
- Grace M. Powell, of the Estate of O. E. Powell, Deceased v. Ralph C. Granquist, District Director of Internal RevenueCourt of Appeals for the Ninth Circuit · 1958
- Acker v. CommissionerUnited States Tax Court · 1956
- Kotmair v. CommissionerUnited States Tax Court · 1986
- Bennett v. CommissionerUnited States Tax Court · 1958
- Keith v. CommissionerUnited States Tax Court · 2000
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