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1245 class property used in petitioners' businesses and that they
are depreciable over 5-year periods. Respondent contends that
the vinyl wall coverings are structural components of the
buildings. Respondent maintains that the vinyl wall coverings
are an alternative for paint, they are intended to remain on the
walls during the useful life of the wall coverings, and they are
not readily removable or reusable.
Section 1.48-1(e)(2), Income Tax Regs., includes as an
example of a structural component walls and permanent coverings
for them. Petitioners contend that the vinyl wall coverings are
not intended or designed to be either integral parts of, or
permanent coverings for, the walls of petitioners' hospitals, but
are decorative coverings for those walls. They are easily
removable, and in most instances, due to changes in the decor of
the hospitals and heavy wear, the vinyl wall coverings already
have been removed without damage to the walls of the hospitals.
Petitioners concede that wall coverings typically are not reused
in their entirety upon removal, but assert that portions of the
vinyl wall coverings could be removed in connection with area
repair work and then reattached to the walls. Petitioners
contend that they used adhesives to attach the vinyl wall
coverings to the walls, and that method of attachment is
expressly recognized as being non-permanent in S. Rept. 95-1263,
1978-3 C.B. (Vol. 1) at 415 (see supra note 48). Petitioners
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