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Section 168(f)(1) only could apply to property that
constitutes section 1250 class property as that term was
understood at the time Congress enacted ACRS. Neither the
statute nor its legislative history reveals an intent by Congress
to redefine section 1250(c) to include property, which at that
time, was considered under long-standing precedent to constitute
section 1245 property. Had Congress intended that outcome, we
believe Congress would have clearly set forth that intent in the
statute or in its legislative history. To the contrary, the
statutory language supports petitioners' position. Section
168(f)(1)(A)(i) provides that "the deduction allowable under
subsection (a) with respect to any component (which is section
1250 class property) of a building shall be computed in the same
manner as the deduction allowable with respect to such building".
(Emphasis added.) Thus, the statutory provision plainly and only
speaks to section 1250 class property, which section 168(g)(4)
defines as property described in section 1250(c). As discussed
supra, the regulations under section 1250(c) incorporate by
reference section 1.1245-3(c), Income Tax Regs., which
incorporates by reference section 1.48-1(e), Income Tax Regs.
Accordingly, we conclude that the statutory language manifests a
congressional intent to retain the prior law distinction between
components that constitute section 1250 class property and
property items that constitute section 1245 class property.
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