DocketNumber: No. 22-78
Citation Numbers: 231 Ct. Cl. 1040
Filed Date: 9/30/1982
Status: Precedential
Modified Date: 11/23/2022
Taxes; income tax; deductions; depreciation; retirement-replacement-betterment accounting; replacement. — Plaintiff seeks refund of federal income taxes paid in satisfaction of a tax deficiency for the tax year 1968 resulting from the Internal Revenue Service’s disallowance of deductions with respect to concrete railroad crossties installed on existing track in place of timber ties. Plaintiff reported the cost of the concrete ties as a betterment under the retirement-replacement-betterment (rrb) method of depreciation accounting on its federal income tax returns for the years in issue. On July 30, 1982, Trial Judge Roald A. Hogenson filed a recommended decision (reported in full at 50 AFTR 2d 82-5395 and 82-2 USTC ¶ 9511) concluding that the cost of installing the concrete ties should be treated as a replacement rather than a betterment under the rrb method of accounting and therefore currently expensed. The trial judge found that the concrete crossties did not constitute a betterment since they were not functionally better than the wooden ties they replaced. Furthermore, plaintiff is not bound by its original determination on the