East Kauai Water Co. v. Commissioner
United States Tax Court
Deductions -- Depreciation -- Section 23 (l) -- Renewal. -- Where a lease or franchise is renewed or a new lease or franchise obtained before the expiration of the existing lease or franchise, the period over which the remaining basis of depreciable property is to be recovered is not limited to the remainder of the existing lease, but may include, if the life of the assets justifies, all or a portion of the new term.
1Opinion of the Court
OPINION.
MuRdock, Judge-.
The precise issue for decision is whether that portion of the cost of the petitioner’s water system which remained undepreciated at the time of the acceptance of the petitioner’s bid for a new franchise should be recovered over the remaining 1 year and 10 months of the original franchise, or over that period plus the 21 years of the new franchise. The petitioner contends that the shorter period should be used, first, because section 19.23 (a)-10 of Regulations 103 relates only to leases which contain an option of renewal, whereas the original franchise contained no…
2Cases cited2 opinions
- United States v. LudeySupreme Court of the United States · 1927
- Union Electric Co. v. CommissionerUnited States Tax Court · 1948
3Cited by11 opinions
- Philadelphia Park Amusement Co. v. United StatesUnited States Court of Claims · 1954
- Westinghouse Broadcasting Co. v. CommissionerUnited States Tax Court · 1961
- Nachman v. CommissionerUnited States Tax Court · 1949
- Alamo Broadcasting Co. v. CommissionerUnited States Tax Court · 1950
- Gulf Tel. Corp. v. CommissionerUnited States Tax Court · 1969
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