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Abstract
In the Cinergy Corp. v. US case, the Court of Federal Claims approved a taxpayer's immediate deduction under Section 162 of the costs of asbestos removal and encapsulation in an office building. The court concluded that the costs at issue were ordinary and necessary business expenses rather than capital expenditures because the remediation costs did not substantially prolong the useful life of the taxpayer's building or adapt it to a new or different use. In addition, the changes were not part of a generalized plan of rehabilitation and renovation. The court reasoned that the abatement work was necessary to maintain the taxpayer's office building in ordinary operating condition. The court distinguished the taxpayer's abatement activities from environmental remediation expenses, which typically are capitalized over time rather than deducted immediately.