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Boilers are not easily removed. The installation and/or
removal of a boiler would require a skilled mechanical
subcontractor.
OPINION
During taxable years ended 1985 through 1988, petitioners
constructed a number of hospital facilities, which they used in
their trade or business. For purposes of our decision as to
petitioners' entitlement to depreciation deductions relating to
those facilities for those taxable years, the parties do not
agree on the appropriate recovery classes or recovery periods for
the disputed property items21 contained in the facilities.
Resolution of that issue entails our decision as to whether the
disputed property items constitute section 1245 class property or
section 1250 class property. The parties have stipulated that if
a disputed property item constitutes section 1245 class property,
it is depreciable over a 5-year recovery period, but if the
disputed property item constitutes section 1250 class property,
it is depreciable over an 18-, 19-, or 31.5-year recovery period
(depending on when the item was placed in service).22
21 The parties have agreed on the classification of a number of
property items relating to the constructed facilities, but they
are unable to agree as to the disputed property items described
supra.
22 The recovery period for real property placed in service
after March 15, 1984, but before May 9, 1985, generally is 18
years. Deficit Reduction Act of 1984 (DRA-1984), Pub. L. 98-369,
sec. 111, 98 Stat. 634; Simplification of Imputed Interest Rules
(continued...)
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