- 14 - factor shows that section 167(c)(2) applies only where the lease is to continue. Respondent correctly points out that the example and discussion of continuing leases does not “expressly condition the application of section 167(c)(2) on the acquisition of a continuing ‘interest of a lessor under a lease of tangible property.’” In the context of the commentary and the example, we agree with respondent that it was not intended to limit the application to a particular type of transaction set forth in the example. Although the example discusses a lease that continues beyond the time of acquisition, it is clear that the example is not intended to be all-inclusive. More particularly, the statutory language could easily apply to leases that terminate upon or immediately after acquisition and/or leases that continue beyond acquisition of the leased asset. Accordingly, the legislative history does not provide definitive guidance or a direct answer to our inquiry of whether section 167(c)(2) applies only to a situation where a lease is to continue in futuro. The commentary and the example do make it absolutely clear, however, that all costs were intended to be allocated to the depreciable tangible property. Petitioner also points out that one of the purposes for enacting section 167(c)(2) was to deal with a specific controversy between lessor/taxpayers and the Internal RevenuePage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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