Denver & Rio Grande Western R. R. v. Comm'r of Internal Revenue
In Denver & Rio Grande Western R. R. v. Comm'r of Internal Revenue, 279 F.2d 368 (10th Cir.), the issue concerned expenditures made by the taxpayer upon an old wooden viaduct.
These expenditures consisted of installing new wooden floor planks over most of the viaduct and some new stringers for the support of the viaduct and to stiffen the structure.
The railroad had expensed the entire amount, and the Tax Court had found that the expense should have been capitalized.
The Court held that the Tax Court was correct and stated that:
"The expenditure resulted in a substantial restoration, strengthening and improvement of the viaduct. It was not for incidental repairs but for a replacement of a major portion of the viaduct which could no longer be repaired. The improvements so made had a useful life of many years."