- 46 -
To resolve that issue, we look to the language of the
statute. Because the relevant ACRS and MACRS provisions differ,
we discuss separately our conclusion that, in prohibiting
component depreciation, Congress did not intend to eliminate from
5-year property those disputed property items which would satisfy
the definition of tangible personal property pursuant to section
1245(a)(3)(A) prior to the enactment of ACRS or MACRS.
ACRS
As we discussed supra, to be classified as 5-year property
the disputed property items must constitute section 1245 class
property. Sec. 168(c)(2)(B).31 Section 1245 class property
consists of "tangible property described in section 1245(a)(3)
other than subparagraphs (C) and (D)."32 Sec. 168(g)(3).33 On
31 For taxable years ended 1984 and 1985, sec. 168(c)(2)(B)
provides as follows:
(B) 5-year property.--The term "5-year property" means
recovery property which is section 1245 class property and
which is not 3-year property, 10-year property, or 15-year
public utility property.
32 Sec. 1245(a)(3) provides as follows:
(3) Section 1245 Property.--For purposes of this
section, the term "section 1245 property" means any
property which is or has been property of a character
subject to the allowance for depreciation provided in
section 167 (or subject to the allowance of amortization
provided in section 185) and is either--
(A) personal property,
(B) other property (not including a building or
its structural components) but only if such other
(continued...)
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