- 116 -
equipment are essential functions of the boilers, and that
neither function is incidental to the other. Accordingly, the
"sole justification" test is not satisfied. See sec. 1.48-
1(e)(2), Income Tax Regs.
Based on the foregoing, we conclude that the boilers are
analogous to the electrical distribution system involved in Scott
Paper Co. v. Commissioner, 74 T.C. 137 (1980). The record,
however, does not demonstrate the percentage of the steam
produced by the boilers that is used to operate hospital
equipment. Consequently, we have no "logical and objective
measure" of the portion of the boilers that would constitute
section 1245 personal property. See Scott Paper Co. v.
Commissioner, supra at 165. Accordingly, we sustain respondent's
determination that the boilers must be depreciated over the same
period as the buildings to which they relate.
To reflect the foregoing,
Appropriate orders
will be issued.
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