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Wolfers v. Commissioner

United States Tax Court

March 21, 1978, Filed

Docket Nos. 6772-75, 6773-75


 [*975]  Respondent determined the following deficiencies in petitioners' Federal income tax for 1972:

Henry L. and Helen F. Wolfers

$ 37,453.80

Nancy A. Mazzoni


These cases were consolidated for trial, briefing, and opinion. Both cases concern deductions claimed by and on behalf of Henry L. Wolfers, Inc. (HLW), a subchapter S corporation. Other issues having been settled by the parties, the issues remaining are:

(1) Whether deductions claimed  [**4]  by HLW for its taxable year  [*976]  ended February 29, 1972, for relocation expenses, professional fees, and excess rent are allowable under section 162 1 in light of HLW's receipt of reimbursement payments therefor under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Relocation Act);

(2) Whether deductions for depreciation claimed by HLW are allowable for leasehold improvements and assets purchased with proceeds received under the Relocation Act; and

(3) Whether petitioners are entitled to investment tax credits for expenditures made by HLW for an air conditioning system and electrical installations.


Most of the facts have been stipulated by the parties and are found accordingly.

At the time they filed their petitions, all petitioners were residents of Wellesley, Mass. At all relevant times petitioners were shareholders of Henry L.  [**5]  Wolfers, Inc. (HLW), a subchapter S corporation. HLW employed the accrual method of accounting and a fiscal year ending February 28 or 29. The common stock of HLW was owned as follows:



of ownership

Henry L. Wolfers

Helen F. Wolfers

Nancy A. Mazzoni

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69 T.C. 975 *; 1978 U.S. Tax Ct. LEXIS 153 **

Henry L. Wolfers and Helen F. Wolfers, Petitioners v. Commissioner of Internal Revenue, Respondent; Nancy A. Mazzoni, Petitioner v. Commissioner of Internal Revenue, Respondent

Disposition:  [**1]  Decisions will be entered under Rule 155.


Relocation, rent, depreciation, reimbursed, exempt, lease, estimated, leasehold, expenditures, displaced, furniture, windfall, replacement, tax-exempt