- 3 - 1006 (7th Cir. 1995), revg. and remanding 103 T.C. 582 (1994). In its opinion, the Court of Appeals quoted Rev. Proc. 77-3, 1977-1 C.B. 535, as directing that "'all classes of Rev. Proc. 72-10 * * * are hereby represcribed to include items of section 1250 property that were included prior to January 1, 1974 * * * except for * * * Building Services and * * * Land Improvements.'" Id. at 1008. From this the Court of Appeals reasoned that if any items of section 1250 property, and specifically the leasehold improvements that Walgreen made in its drugstores and restaurants between 1980 and 1984, had been included in Wholesale and Retail Trade by Rev. Proc. 72-10, they continued to be included in it after the Treasury "represcribed" the classes of Rev. Proc. 72-10 (all but Building Services and Land Improvements) in 1977. The Asset Depreciation Range system was later replaced by the Accelerated Cost Recovery System, and it is the latter system that is applicable to the leasehold improvements in this case. But it incorporates by reference the earlier classifications, with the result that if the leasehold improvements are classified in Wholesale and Retail Trade (now Class 57.0, but identical to the old Class 50.0, Hauptli v. Commissioner, 56 T.C.M. (CCH) 583, 586, 1988 WL 116965 (T.C. 1988), revd. on other grounds, 902 F.2d 1505 (10th Cir. 1990)), Walgreen can depreciate them over 10 years. Otherwise it must depreciate them over either 15 or 18 years, depending on the dates on which various improvements were made. 26 U.S.C. sections 168(c)(2)(C)(ii), (D), (g)(2) (1984). In summary, when in 1972 the Internal Revenue Service (in Rev. Proc. 72-10) repromulgated the class Wholesale and Retail Trade after "eligible property" had been expanded to include section 1250 property, the effect was to bring within the class all assets used in wholesale or retail trade except those classifiable under Building Services; and when five years later the Service repromulgated the Wholesale and Retail TradePage: Previous 1 2 3 4 5 6 7 8 Next
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