Opinion ID: 778819
Heading Depth: 4
Heading Rank: 5

Heading: Provision of Benefits Beyond One Year

Text: 42 Finally, Vanalco takes issue with the tax court's consideration of whether Vanalco's relining expenditures allowed it to realize benefits beyond the year in which the expenditures were incurred. Vanalco suggests that because other courts have not adhered to this one-year guide-post, the tax court somehow erred in doing so here. It is well established, however, that courts may consider the accrual of benefits beyond one year as a factor that weighs in favor of capitalization: Although the mere presence of an incidental future benefit — `some future aspect' — may not warrant capitalization, a taxpayer's realization of benefits beyond the year in which the expenditure is incurred is undeniably important in determining whether the appropriate tax treatment is immediate deduction or capitalization. INDOPCO, 503 U.S. at 87, 112 S.Ct. 1039; see also United States v. Wehrli, 400 F.2d 686, 689 (10th Cir.1968) (noting that the one-year rule serves as a guidepost for the resolution of the ultimate issue). The tax court, therefore, did not err in relying on the one-year guidepost as one factor supporting its decision. 43 In conclusion, we affirm the tax court's determination that the costs incurred by Vanalco in 1992 and 1993 associated with cell relining were capital expenditures under § 263.