
    Minnesota Cement Construction Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 6284.
    Promulgated February 18, 1927.
    
      Benjamin E. Flesher, Esq., for the petitioner.
    
      F. 0. Graves, Esq., for the respondent.
   Trammell:

This is a proceeding for the redetermination of a deficiency in income and profits taxes for 1919. The deficiency asserted is $58.27 and arises on account of the action of the respondent in disallowing as a deduction the amount claimed by the petitioner as depreciation on its building.

findings of fact.

The petitioner is a Minnesota corporation, with its principal office in Minneapolis. In the fall of 1916 it began the erection of buildings which were completed during the following winter at a total cost of $5,930.80, to which an addition was made in 1919 which cost $1,000.

These buildings were used by the petitioner in its business. They were constructed of cement staves and blocks, were of flimsy construction and were not reinforced by steel. They had a thin wall construction, were erected on boggy or marshy ground and vibrated when heavy trucks went by. The extreme cold on the outside and the heat from the inside caused considerable damage to the buildings. The heat on the inside was necessary on account of the use of steam during the winter in the manufacturing business. During the summer this condition did not exist. In 1926 the walls showed very great deterioration and one whole side was in very bad condition. The whole roof of the factory building has been replaced, which replacement was made necessary by reason of the clouds of steam that came out of the curing kilns when they were opened to take cars out. The staves on the outside are falling to pieces.

The petitioner in his return claimed a deduction on account of the depreciation of said buildings at the rate of 10 per cent. The respondent disallowed this deduction and determined that the rate of depreciation should have been 2 per cent. The life of the building is 10 years and the proper rate of depreciation is 10 per cent.

Judgment will be entered for the petitioner.  