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the timing of the depreciation deductions raises questions
regarding GRC's intended use of the Ashland Building and who was
actually using the building during the years in issue.
Depreciation deductions may not be claimed until an asset is
placed in service. Rybak v. Commissioner, 91 T.C. 524, 561
(1988); sec. 1.167(a)-10(b), Income Tax Regs. An asset is first
placed in service when it is placed "in a condition or state of
readiness and availability for a specifically assigned function".
Sec. 1.167(a)-11(e)(1)(i), Income Tax Regs.; see also Cooper v.
Commissioner, 542 F.2d 599, 601 (2d Cir. 1976), affg. per curiam
T.C. Memo. 1975-320; Piggly Wiggly S., Inc. v. Commissioner, 84
T.C. 739, 745-746 (1985), affd. on another issue 803 F.2d 1572
(11th Cir. 1986). The Ashland Building was apparently placed in
service, substantially complete and available for occupancy, on
August 1, 1990, with later related building improvements placed
in service on January 2, 1992, January 1, 1993, and February 15,
1994. However, petitioners claim that GRC has utilized the
Ashland Building as its corporate headquarters and for record
storage since 1995, and that GRC has used the building as an
operational precious metals melting facility since February 1998.
Given these facts, we conclude that an entity, other than GRC,
utilized the Ashland Building during the years in issue.
And third, we find numerous inconsistencies between GRC's
stated intent to use the Ashland Building as a refinery and other
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