
    Appeals of LOUIS C. LEVY and CHARLES A. LEVY.
    Docket Nos. 3043, 3045.
    Submitted May 26, 1925.
    Decided July 14, 1925.
    - Expenditures for alteration and improvement of leased premises, by the lessees, held to be capital expenditures rather than current expense, and depreciable over the remaining life of the lease. Appeal of National City Bank of Beattie, 1 B. T. A. 139.
    
      William G. Wheeler, Esq., for the taxpayer.
    
      George G. Witter, Esq., for the Commissioner.
    Before Ivins, Maequette, and MoRRis.
    These appeals result from deficiency letters dated February 6, 1925, proposing to assess additional income taxes for the years 1919 and 1920, in the amount of $696.18 against Louis C. Levy, and in the amount of $786.95 against Charles A. Levy. The allegations of fact contained in the petitions are admitted by the answers, and from them the Board makes the following
    
      FINDINGS OF FACT.
    The taxpayers are copartners engaged in a mercantile business at Janesville, Wis., under the firm name of Charles A. Levy & Brother.
    The firm of Charles A. Levy & Brother commenced business over twenty years ago in a rented store which was part of a business block. As the business grew, adjoining store space was rented and connected.to the original store. There have been four such enlarge-, ments, the expense of each being borne by the partnership, except in one instance. By agreement title to all material put in or taken out of the building by the taxpayers has vested in the landlord.
    In 1919 the growth of the business required additional space and extensive alterations. These alterations consisted of changes in the store, office, tearing out a stairway, removal of second-floor partitions, changes in the lighting and plumbing systems, installation of two elevators and construction of some wall.
    The store office, the stairway' and some of the second-floor partitions had been constructed by the taxpayers in 1915.
    The expense of the 1919 improvements was borne by the taxpayers and amounted to $16,866.55.
    The taxpayers leased only a portion of the building in which the store is situated, other portions being occupied by various tenants holding from the landlord. Neither the terms nor the duration of the taxpayers’ lease appear in the record.
    The taxpayers charged $6,237.31 of the expenditures above described to current expense for 1919 and the remaining $10,629.34 to capital account.
    The Commissioner has refused to allow the deductions from the taxpayers’ 1919 income of the amount charged to current expense, because he contends it is a capital expenditure to be depreciated over the remaining life of the lease. On appeal the taxpayers contend that they may charge the entire expenditure of $16,866.55 to current expense for 1919.
    DECISION.
    The deficiencies determined by the Commissioner are approved.
   OPINION.

Ivins:

The taxpayers’ material contentions being directly in point, the appeals are denied upon authority of the decision of the Supreme Court in Duffy v. Central R. R. Co. of New Jersey, 268 U. S. 55, and of this Board’s decisions in the Appeal of the National City Bank of Seattle, 1 B. T. A. 139, and Appeal of Simmons & Ham mond Mfg. Co., 1 B. T. A. 803. The expenditure giving rise to this controversy may be depreciated over the remaining life of the lease, as the Commissioner contends it should be.  