Hotel Sulgrave, Inc. v. Commissioner
United States Tax Court
Cost of installing sprinkler system in petitioner's hotel held to constitute a capital outlay and not an ordinary and necessary business expense. Held, further, amount by which it exceeded cost of installing similar system in comparable new building is merely part of capital outlay and not a currently deductible expense.
1Opinion of the Court
OPINION.
Naum, Judge:
The petitioner contends that the installation of the sprinkler system was a repair which was made for the purpose of keeping the hotel property in ordinarily efficient operating condition and which did not add to the value of the property or prolong its life; and that the expenditure made therefor is an ordinary and necessary business expense deductible in the year ended June 30, 1950.
We do not agree that the installation of the sprinkler system constituted a repair made “for the purpose of keeping the property in an ordinarily efficient operating condition.” Cf. Illinois…
2Cases cited4 opinions
- Difco Laboratories, Inc. v. CommissionerUnited States Tax Court · 1948
- Driscoll v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1945
- Rankin v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1932
- Frank & Seder Co. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1930
3Cited by32 opinions
- Plainfield-Union Water Co. v. Comm'rUnited States Tax Court · 1962
- Schultz v. CommissionerUnited States Tax Court · 1968
- Riss & Co. v. CommissionerUnited States Tax Court · 1964
- Woolrich Woolen Mills v. United StatesCourt of Appeals for the Third Circuit · 1961
- Lincoln Sav. & Loan Asso. v. CommissionerUnited States Tax Court · 1968
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