§178 — Amortization of cost of acquiring a lease
16 cases·4 followed·2 distinguished·10 cited—25% support
Statute Text — 26 U.S.C. §178
In determining the amount of the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization in respect of any cost of acquiring the lease, the term of the lease shall be treated as including all renewal options (and any other period for which the parties reasonably expect the lease to be renewed) if less than 75 percent of such cost is attributable to the period of the term of the lease remaining on the date of its acquisition.
For purposes of subsection (a), in determining the period of the term of the lease remaining on the date of acquisition, there shall not be taken into account any period for which the lease may subsequently be renewed, extended, or continued pursuant to an option exercisable by the lessee.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.178-1 Depreciation or amortization of improvements on leased property and cost of acquiring a lease
- Treas. Reg. §Treas. Reg. §1.178-1(a) In general.
- Treas. Reg. §Treas. Reg. §1.178-1(b) Determination of amount of deduction.
- Treas. Reg. §Treas. Reg. §1.178-1(c) Application of section 178(a) where lessee gives notice to lessor of intention to exercise option.
- Treas. Reg. §Treas. Reg. §1.178-1(d) Application of section 178 where lessee is related to lessor.
- Treas. Reg. §Treas. Reg. §1.178-1(i) §1.178-1(i)
16 Citing Cases
Section 178 provides rules for determining the amount ofdepreciation or amortization deduction allowable to a lessee for both the cost ofacquiring a lease and for improvements made on leased property.
Section 178 provides rules for determining the amount ofdepreciation or amortization deduction allowable to a lessee for both the cost ofacquiring a lease and for improvements made on leased property.
For example, section 178 of the Restatement (Second) of Contracts (1981) has a multifactor test for when a promise or a contractua l 14 The estate also quite pointedly notes that the Government itself uses the contested phrase : The charitable annuity trust regulations make an interest determinable even if the amount to be paid is expressed "in terms of a fract
For example, section 178 of the Restatement (Second) of Contracts (1981) has a multifactor test for when a promise or a contractual term is unenforceable because of public policy considerations, and lists numerous illustrations in the comments ranging from illegality to unreasonable restraints on trade.
164 (1968); 49 Am.Jur.2d, - 12 - Landlord and Tenant, sec. 141 (1995). It appears that Nebraska recognizes such a distinction. In Mauzy v. Elliott, 22 N.W.2d 142, 147 (Neb. 1946), the Supreme Court of Nebraska quoting 35 C.J., Landlord and Tenant, sec. 178 at 1037, stated that “each renewed lease is a new lease, and the taking of it operates as a surrender of the old one.” The court further noted that the original lease could be considered to be continued only for the protection of certain “lega
The cost of acquiring an interest as a lessee under an existing lease of tangible property is to be taken into account under present law (see section 178 of the Code and Treas.