1928 BTA LEXIS 4266 | B.T.A. | 1928
Lead Opinion
The theory that improvements placed upon leased property by the lessee result immediately in income to the lessor has been established by the courts. Miller v. Gearin (C. C. A.), 258 Fed. 225; Cryan v. Wardell, 263 Fed. 248.
To this view we can not agree. The building was substantially constructed and there is no evidence to overcome the Commissioner’s findings that it would have a normal life of 50 years. There is evidence that the trend of development is away from this location and that the economic life of theatres of this sort is much shorter than the physical life of the building. From all the evidence we are of the opinion that petitioner’s interest in the building should be depreciated at the rate of 3y3 per cent per annum over the life of the lease in determining its residual value at the expiration of the lease.
There is no evidence in the record which would permit us to pass on the second assignment of error. The Commissioner must, therefore, be sustained on this point.
Judgment will he entered on 10 days’ notice, wider Rule 50.