                  T.C. Summary Opinion 2002-117



                     UNITED STATES TAX COURT



                  NEVIA CAMPBELL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7122-01S.             Filed September 6, 2002.


     Nevia Campbell, pro se.

     Angelique M. Neal, for respondent.



     PAJAK, Special Trial Judge:    This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   Unless otherwise

indicated, section references are to the Internal Revenue Code in

effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.
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     Respondent determined a deficiency in petitioner’s 1998

Federal income tax in the amount of $3,334.   After concessions by

respondent and petitioner, the sole issue this Court must decide

is whether petitioner is entitled to deduct the cost of removing

and replacing the roof-covering material on her residential

rental house.

     Some of the facts in this case have been stipulated and are

so found.   Petitioner resided in Compton, California, at the time

she filed her petition.

     During 1998, petitioner, an employee of the United States

Postal Service, owned a residential rental house in Long Beach,

California (rental house).   The rental house was a one-story

building with 2 bedrooms and a den.

     The house had been rented to the then tenant for about 4

years when the roof began leaking and moisture began seeping

through the walls into the main bedroom of the house.   The tenant

complained to petitioner and, as petitioner put it in lay

person’s terms:   “So we had to get it repaired.”   She could not

have continued to rent the house if the roof had continued to

leak.

     Petitioner contacted TEAM DK Contractors (the contractors),

who gave petitioner an estimate.   She “went with them” and paid

the contractors with funds she had to borrow.   One of the

partners of the contractors testified at trial that “we did
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repairs on the roof.”   The work done on the rental house by the

contractors also included interior repairs and drywall

installation, the cost of which respondent has conceded.

     The contractors removed the existing top layers of the roof

and recovered it with fiberglass sheets and hot asphalt.     They

made no structural changes to the roof.    The $8,000 cost of

removing and replacing the roof-covering material on the roof of

the rental house is the amount in issue.    Petitioner claims it is

a deductible expense; respondent argues it is a capital expense.

     Section 162 provides for the deduction of all ordinary and

necessary expenses paid or incurred during the taxable year in

carrying on a trade or business.   See sec. 62(a)(4).    The costs

of incidental repairs to property are deductible if those repairs

neither materially add to the value of the property nor

appreciably prolong the life of the property.    Sec. 1.162-4,

Income Tax Regs.   Repairs in the nature of replacements, to the

extent that they arrest deterioration and appreciably prolong the

life of the property, must generally be capitalized and

depreciated in accordance with section 167.     Id.   Further,

section 263(a) provides that no deduction shall be allowed for

permanent improvements or betterments made to increase the value

of any property.

     The issue in this case has been considered previously by

this Court in Oberman Manufacturing Co. v. Commissioner, 47 T.C.
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471 (1967).    In that case, the Court held that the cost of

removing and replacing roof-covering material (as well as the

cost of inserting an expansion joint in the roof) was a

deductible expense.    The Court observed that “it is necessary to

take into consideration the purpose for which an expenditure is

made in order to determine whether such expenditure is capital in

nature or constitutes a current expense.”      Oberman Manufacturing

Co. v. Commissioner, supra at 482.      The Court in Oberman

Manufacturing Co. observed that the taxpayer’s only purpose was

to prevent leakage and keep the leased property in an operating

condition over its probable useful life and not to prolong the

life of the property, increase its value, or make it adaptable to

another use.    There was no replacement or substitution of the

roof.   Petitioner’s only purpose in having the work done to the

roof was to prevent the leakage and keep her rental house in

operating condition and not to prolong the life of the property,

increase its value, or make it adaptable to another use.       As in

Oberman Manufacturing Co., there was no replacement or

substitution of the roof.    Petitioner’s expenditure merely

restored her rental house to one with a roof free of leaks.      On
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this record, we hold that petitioner is entitled to deduct the

expenditure in issue.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                           Decision will be entered

                                      under Rule 155.
