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periods. Petitioners maintain that the question of whether
property constitutes section 1245 or section 1250 property
frequently was presented to respondent and to the courts in the
context of whether property constituted tangible personal
property for purposes of qualifying for ITC and that a similar
analysis is appropriate for purposes of ACRS and MACRS.
Respondent has raised a number of arguments in support of
the position that the disputed property items constitute section
1250 class property. Respondent's principal argument is that
using a different recovery period for the disputed property items
than for the buildings to which they relate in effect results in
component depreciation, which method is no longer permitted under
ACRS and MACRS. Respondent argues that the cases on which
petitioners primarily rely are not applicable to the instant case
because those cases involve tax years prior to 1981, when
component depreciation was permissible, and they deal with ITC.
Respondent asserts that the judicially developed ITC tests have
limited application in determining what constitutes a structural
component for purposes of applying ACRS and MACRS in light of the
elimination of the component method of accounting. Respondent
maintains that the disputed property items must be depreciated
over the same recovery period as the structure to which they
relate. Respondent's position raises an issue of first
impression.
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