- 60 -
not "tangible" or "personal". Id. The term "tangible personal
property" is not intended to be defined narrowly and includes
assets accessory to the operation of a business. Illinois Cereal
Mills, Inc. v. Commissioner, 789 F.2d 1234, 1237 (7th Cir. 1986),
affg. T.C. Memo. 1983-469; Metro Natl. Corp. v. Commissioner,
T.C. Memo. 1987-38; see also S. Rept. 1881, 87th Cong., 2d Sess.
(1962), 1962-3 C.B. 707, 858; Morrison, Inc. v. Commissioner,
T.C. Memo. 1986-129, affd. 891 F.2d 857 (11th Cir. 1990).42
In Whiteco Indus., Inc. v. Commissioner, 65 T.C. 664, 672-
673 (1975), we listed the following factors to consider in
resolving whether property is inherently permanent and, thus, not
tangible personal property within the meaning of section 1.48-
1(c), Income Tax Regs.: (1) Is the property capable of being
42 S. Rept. 1881, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 707,
722, in defining "section 38 property" for purposes of the
investment tax credit, stated in pertinent part as follows:
Except for the exclusions noted below, all tangible
personal property qualifies as section 38 property.
* * * Tangible personal property is not intended to be
defined narrowly here, nor to necessarily follow the
rules of State law. It is intended that assets
accessory to a business such as grocery store counters,
printing presses, individual air-conditioning units,
etc., even though fixtures under local law, are to
qualify for the credit. Similarly, assets of a
mechanical nature, even though located outside a
building, such as gasoline pumps, are to qualify for
the credit. Real property (other than buildings and
structural components) which qualifies as integral
parts of categories referred to above includes such
assets as blast furnaces, oil and gas pipelines,
railroad track and signals, and fences used in
connection with raising cattle.
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