Wolfsen Land & Cattle Co. v. Commissioner
United States Tax Court
Petitioner purchased Ranch with extensive irrigation system. Held: Useful life of system indeterminable and hence nondepreciable. Rather than adopting a program of annual maintenance, petitioner elected to permit the irrigation system to deteriorate over a period of years until it became dysfunctional. At that time it expended considerable sums restoring the irrigation system to its original capability.
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Petitioner purchased Ranch with extensive irrigation system. Held: Useful life of system indeterminable and hence nondepreciable. Rather than adopting a program of annual maintenance, petitioner elected to permit the irrigation system to deteriorate over a period of years until it became dysfunctional. At that time it expended considerable sums restoring the irrigation system to its original capability. Held, further: Petitioner was within its rights to eschew annual maintenance. Cost to restore system to its original capability amortizable as an intangible asset over the demonstrated useful…
1Opinion of the Court
Sterrett, Judge:
By notice of deficiency dated October 4, 1974, respondent determined deficiencies in petitioner’s Federal income taxes for its taxable years ended July 31,1971 and 1972, in the respective amounts of $421.79 and $350,618.18. The major item involved in the deficiencies was the disallowance by respondent of a claimed deduction for prepaid cattlefeed expenses for petitioner’s taxable year ended July 31, 1972. Petitioner’s petition to this Court was filed December 24, 1974. That petition conceded all respondent’s adjustments except for the prepaid cattlefeed adjustment. The claimed…
2Cases cited12 opinions
- Commissioner v. TellierSupreme Court of the United States · 1966
- Commissioner v. Idaho Power Co.Supreme Court of the United States · 1974
- Illinois Merchants Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1926
- Plainfield-Union Water Co. v. Comm'rUnited States Tax Court · 1962
- Bayou Verret Land Co. v. CommissionerCourt of Appeals for the Fifth Circuit · 1971
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- Bank One Corp. v. Comm'rUnited States Tax Court · 2003
- Phillips Petroleum Co. v. CommissionerUnited States Tax Court · 1995
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