- 36 -
Commissioner, 103 T.C. 285, 289, 290 (1994), affd. 65 F.3d 329
(3d Cir. 1995); see also Collins Music Co. v. United States, 21
F.3d 1330, 1332 (4th Cir. 1994); S. Rept. 97-144, at 47 (1981),
1981-2 C.B. 412, 425. ACRS permits a depreciation deduction for
recovery property over a predetermined recovery period by
applying a statutory percentage to its cost. Sec. 168(b); Schrum
v. Commissioner, T.C. Memo. 1993-124, affd. in part and vacated
and remanded in part on another issue 33 F.3d 426 (4th Cir.
1994).
Recovery property is defined generally as "tangible property
of a character subject to the allowance for depreciation--(A)
used in a trade or business, or (B) held for the production of
income." Sec. 168(c)(1). Recovery property is assigned to one
of the following classes of property: 3-year property, 5-year
property, 10-year property, 19-year real property, 15-year public
utility property, or low-income housing. Sec. 168(c)(2). A
special rule applies for theme parks. Sec. 168(c)(2)(G).
Five-year property includes section 1245 class property
which is not 3-year property, 10-year property, or 15-year public
utility property. Sec. 168(c)(2)(B). Five-year property, thus,
includes section 1245 class property with no assigned class life.
Sec. 168(c)(2)(B); Collins Music Co. v. United States, supra at
1333. Nineteen-year real property "means section 1250 class
property which--(i) does not have a present class life of 12.5
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