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real property are depreciated using the same recovery period
applicable to the underlying property as if the underlying
property were placed in service at the time the improvements were
made. Accordingly, MACRS continues the prohibition against the
use of the component method of depreciation. S. Rept. 99-313, at
105 (1986), 1986-3 C.B. (Vol. 3) 105.
Congress did not assign a specific class life to the
disputed property items placed in service during 1986 and 1987.
See sec. 168(e)(3). Accordingly, the parties agree that the
disputed property items constitute 5-year property, as
petitioners contend, only if the items have a class life of more
than 4 years but less than 10 years pursuant to Rev. Proc. 87-56,
as clarified and modified by Rev. Proc. 88-22, sec. 168(c),
(e)(1), and the disputed property items do not constitute
30 (...continued)
of) any property--
(A) any deduction under subsection (a) for such
addition or improvement shall be computed in the same
manner as the deduction of such property would be
computed if such property had been placed in service at
the same time as such addition or improvement, and
(B) the applicable recovery period for such
addition or improvement shall begin on the later of--
(i) the date on which such addition (or
improvement) is placed in service, or
(ii) the date on which the property with
respect to which such addition (or improvement)
was made is placed in service.
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