Gladding Dry Goods Co. v. Commissioner
United States Board of Tax Appeals
Where the lessee and the lessor, during the term of a lease, agree on the extension of the lease upon the condition or agreement that the lessee incur the expense of all necessary improvements, the cost to the lessee of such improvements thereafter made should be depreciated or amortized over the period of the lease as extended and not over the term of the original lease.
1Opinion of the Court
*337OPINION.
Ivins:
During the term of the lease, and eleven years prior to its expiration date, the lessors and lessee agreed to an extension of the term for ten years beyond the original date of expiration. The lessors agreed to the extension only on the condition that the lessee *338bear the cost of certain improvements. The improvements were made at a cost to the lessee of $450,489.07 up to a certain date. The parties agreed that the improvements would become the property of the lessors at the expiration date of the original lease.
In that situation, is the lessee entitled to depreciate the cost of…
2Cases cited1 opinion
- Von Baumbach v. Sargent Land Co.Supreme Court of the United States · 1917
3Cited by38 opinions
- Mayerson v. CommissionerUnited States Tax Court · 1966
- Westinghouse Broadcasting Co. v. CommissionerUnited States Tax Court · 1961
- Tolwinsky v. CommissionerUnited States Tax Court · 1986
- Durkin v. CommissionerUnited States Tax Court · 1986
- Law v. CommissionerUnited States Tax Court · 1986
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