Midland Empire Packing Co. v. Commissioner

14 T.C. 635 (1950)

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Nature of the Case

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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.