David J. Duez, Lydia R.B. Kelley, and Gregory F. Jenner, for
petitioner.
James S. Stanis, Patricia Pierce Davis, and James M.
Cascino, for respondent.
SUPPLEMENTAL MEMORANDUM OPINION
NIMS, Judge: In Walgreen Co. & Subs. v. Commissioner, 103
T.C. 582 (1994), revd. and remanded 68 F.3d 1006 (7th Cir. 1995),
we held that section 5 of the Act of January 3, 1975 (1974 Act),
Pub. L. 93-625, 88 Stat. 2112, removed all section 1250 property
from the Asset Depreciation Range (ADR) classification system,
until such time as the Treasury Department prescribed class lines
explicitly containing section 1250 property, which had not been
done as of the time the case was submitted. Since the parties
stipulated that all of the leasehold improvements in dispute
constituted section 1250 property, we held, consistently with the
foregoing holding, that the improvements had no ADR class life
and that, consequently, section 168(c)(2)(D) designated them as
15-year real property, as opposed to 10-year recovery property.
Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the years in
issue. Rule references are to the Tax Court Rules of Practice
and Procedure.
The U.S. Court of Appeals for the Seventh Circuit reversed
and remanded this case for a further factual determination,
described infra. Walgreen Co. & Subs. v. Commissioner, 68 F.3d
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