Court Opinion

ID: 4476490
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:02.685655+00
Date Added: 2024-06-11T15:03:25.625445
License: Public Domain

Murdock, J., dissenting: A property improved with a 3-story brick building was occupied by rent-paying tenants who desired to continue their leases. The petitioner.purchased the property because it desired to construct on the land, which was adjacent to its bank building, a building more suitable to its own uses. It paid $37,500 for the property, allocating $5,225.25 as the cost of the building. Had it demolished the building and built another in its place the entire cost of the property would have been recognized as the cost of the land. However, it found that it could not rebuild, so it changed its plans, at least temporarily, and continued to lease the building to the then tenants. Thus the building actually had value and produced income. The petitioner should be allowed to’ recover through depreciation some amount representing the cost of the building to it. Later, a fire partially destroyed the building and the insurance proceeds were placed in a replacement fund and eventually used to pay a part of the cost of a bank building constructed on the land. The new building, although different in some respects from the old one, was, nevertheless, similar or related in service or use to the old one within the meaning of section 112 (f), since both were commercial buildings making business uses of land on Main Street in Lynchburg. The difference in service and use is not sufficient to preclude the application of section 112 (f), a relief provision. Washington Market Co., 25 B. T. A. 576; Washington Railway & Electric Co., 40 B. T. A. 1249; Massillon-Cleveland-Akron Sign Co., 15 T. C. 79. Arundell and Withey, JJ., agree with this dissent.