Court Opinion

ID: 4594538
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:13:10.05195+00
Date Added: 2024-06-11T07:51:16.260168
License: Public Domain

BREWSTER LAUNDRY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Brewster Laundry v. CommissionerDocket No. 14005.United States Board of Tax Appeals10 B.T.A. 496; 1928 BTA LEXIS 4099; February 2, 1928, Promulgated *4099  Reasonable allowance for exhaustion, wear and tear of laundry machinery and equipment determined.  C. H. Pease, C.P.A., for the petitioner.  James A. O'Callaghan, Esq., for the respondent.  MARQUETTE *496  This proceeding is for the redetermination of deficiencies in income and profits taxes asserted by the respondent in the amounts of $393.04 for the year 1920 and $1,087.53 for the year 1921.  Only so much of the deficiencies is in controvery as is due to the disallowance by the respondent of parts of deductions taken by the petitioner on its returns for 1920 and 1921 as allowances for depreciation of laundry machinery and equipment.  FINDINGS OF FACT.  The petitioner is a corporation organized under the laws of the State of Illinois about January, 1917, with its principal office and place of business at Chicago.  *497  During the years 1920 and 1921 the petitioner owned and operated a laundry, fully equipped with machinery and equipment suitable for that purpose.  The average useful life of the machinery and equipment was 10 years.  The respondent, upon audit of the petitioner's income and profits-tax returns for 1920 and 1921, *4100  allowed in each year as a deduction for the exhaustion, wear and tear of the petitioner's laundry machinery and equipment, an amount computed on the basis of a useful life of 20 years instead of an amount computed on a basis of 10 years as claimed by the petitioner.  OPINION.  MARQUETTE: The only question presented by the record in this proceeding is the rate which should be used in computing the allowance to which the petitioner is entitled for the exhaustion, wear and tear of its laundry machinery and equipment.  The petitioner contends that the average useful life of the machinery and equipment is 10 years, and that it is entitled to an allowance for the exhaustion, wear and tear thereof computed at the rate of 10 per cent.  The respondent has determined that the average useful life of the machinery and equipment is 20 years and has allowed a deduction computed at the rate of 5 per cent.  There appears to be no dispute as to the cost or value upon which the allowance should be based.  Upon consideration of the evidence presented to us we are satisfied that the average useful life of the machinery and equipment in question is 10 years and that an allowance for the exhaustion, *4101  wear and tear thereof computed at the rate of 10 per cent is reasonable.  Judgment will be entered on 15 days' notice, under Rule 50.