MIDLAND EMPIRE PACKING CO. V. COMMISSIONER
14 T.C. 635 (1950)
NATURE OF THE CASE: This was a dispute over oil proofing a basement and whether it was a
capital improvement or a repair.
FACTS: Midland (D) had to spend money to oil-proof its basement against an oil nuisance
created by a neighboring refinery. D claimed it as an ordinary and necessary expense under
162(a) as a repair or in the alternative that it may be treated as the measure of loss
sustained during the taxable year and not compensated for by insurance or otherwise under
165(a). The Commissioner contends that the expenditure is for a capital improvement and
should be depreciated and not be deductible as an ordinary and necessary business expense.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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