1927 BTA LEXIS 3700 | B.T.A. | 1927
Lead Opinion
The evidence convinces ns that the petitioner owned a lemon grove of 15,000 trees at March 1, 1913, that such grove had a fair market value of $180,000 at that date, that the grove was producing lemons in commercial quantities at such date, and that the useful life of a lemon tree is 30 years.
During the taxable year the grove was in full bearing as a commercial orchard, and the petitioner is entitled to an annual allowance for its exhaustion under the provisions of section 234 (a) (7) of the Revenue Act of 1918. We have found that the normal useful life of a lemon tree is 80 years. It follows, therefore, that the average composite useful life of all the trees in the grove is 30 years and that the petitioner is entitled to an annual allowance of 3½ per cent as a deduction from gross income, based on value at March 1, 1913, plus subsequent capital additions.
There appears to be some confusion in relation to equipment acquired during the taxable year. The petitioner alleges that the Commissioner refused to allow any deductions on account of depreciation of such equipment, but this is denied. The petitioner is entitled to deduct from its gross income for the taxable year depreciation on implements and equipment acquired during the year at times and costs and stipulated rate of depreciation as set forth in our findings above.
Judgment will be entered after W days' notice, under Rule SO.
