L.L. Bean, Inc., Leon Gorman, Tax Matters Person - Page 23

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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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