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any structure or edifice enclosing a space within its
walls, and usually covered by a roof, the purpose of
which is, for example, to provide shelter or housing,
or to provide working, office, parking, display, or
sales space. The term includes, for example,
structures such as apartment houses, factory and office
buildings, warehouses, barns, garages, railway or bus
stations, and stores. * * * [Sec. 1.48-1(e)(1),
Income Tax Regs.]
In determining whether a structure is a building for purposes of
the ITC, the regulations and the case law examine both the
appearance and the function of the structure. Munford, Inc. v.
Commissioner, supra at 479. The appearance test, whether the
structure looks like a building, generally requires a structure
enclosing a space within its walls and covered by a roof. Sec.
1.48-1(e)(1), Income Tax Regs.
A. Reserve Facility
We have examined photographs, blueprints, and videotapes of
the Reserve Facility and have considered the testimony of the
witnesses. The Reserve Facility is a structure of substantial
dimensions that encloses space10 surrounded by walls and covered
by a roof. See Yellow Freight Sys., Inc. v. United States, 538
F.2d 790, 796 (8th Cir. 1976); Munford, Inc. v. Commissioner,
10Petitioner argues that the Reserve Facility does not
enclose space, but, rather, encloses almost nothing except for
the storage rack system. This argument ignores the obvious
purpose for the racks; i.e., to allow petitioner to use the space
within the Reserve Facility for the storage of its merchandise.
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