By its payment, Rodeway enhanced its business opportunities in the Southwest area and obtained the chances of increased income from that territory, and payments made for such reasons are capital in nature. Darlington-Hartsville Coca-Cola Bot. Co. v. United States, 393 F.2d 494 (C.A. 4, 1968), certiorari denied 393 U.S. 962 (1968); Darrell D. Hudgins, 55 T.C. 534 (1970 ); Bay Counties Title Guaranty Co., 34 T.C. 29 (1960), affirmed per curiam 288 F.2d 187 (C.A. 9, 1961); see KWTX Broadcasting Co., 31 T.C. 952 (1959), affirmed per curiam 272 F.2d 406 (C.A. 5, 1959); cf. Medco Products Co., 62 T.C. 509 (1974). Thus, the payment by Rodeway was not merely to maintain its existing business.
As a general rule, an amount expended to acquire an asset which has a useful life of more than 1 year in the taxpayer's business is treated as a capital investment and is not deductible from current income as an ordinary and necessary business expense. United States v. Akin, 248 F.2d 742, 744 (C.A. 10, 1957), certiorari denied 355 U.S. 956 (1958); Bay Counties Title Guaranty Co., 34 T.C. 29, 39 (1960), affirmed per curiam 288 F.2d 187 (C.A. 9, 1962). See also Acer Realty Co. v. Commissioner, 132 F.2d 512, 514 (C.A. 8, 1942), affirming 45 B.T.A. 333 (1941).