- 51 -
The foregoing statutory and regulatory provisions support a
conclusion that Congress intended that the same tests be used to
ascertain whether property constitutes section 1245 class
property or section 1250 class property for purposes of ACRS as
are applied for purposes of determining whether property
qualifies for ITC. See also Schrum v. Commissioner, 33 F.3d 426,
437 (4th Cir. 1994), affg. in part and vacating and remanding in
part on another issue T.C. Memo. 1993-124, where the Court of
Appeals observed: "That the classes of section 38 property and
section 1245 property are, for present purposes, coextensive, is
confirmed by Treasury Regulation � 1.1245-3(b)(1), which, in
defining section 1245 property, makes several references to
Treasury Regulation � 1.48-1(c)." (Fn ref. omitted.)
Respondent, however, contends that section 168(f)(1),38
which prohibits component depreciation, effectively operates to
change the definition of tangible personal property for purposes
of ACRS to eliminate from section 1245 class property, and to
include in section 1250 class property, any item which is
attached to a building and that has utility beyond its relation
to a particular piece of property, even if under long-standing
precedent the property constitutes personal property for purposes
of section 38 and section 1245. We, however, do not agree.
38 See supra note 25.
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