- 31 -
sec. 1.48-1(c), Income Tax Regs. Petitioner argues that the
structural elements of the Reserve Facility are so closely
related in design, construction, and function to the transtackers
that they cannot realistically be treated as two separate groups
of assets.
Petitioner's reliance upon section 1.48-1(c), Income Tax
Regs., is based, in large part, on Weirick v. Commissioner,
supra, in which we considered whether certain line towers and
passenger ramps used in the operation of a ski lift were section
38 property. In Weirick, we held that the line towers were so
affixed to the ground as to be considered inherently permanent
structures. We also held that certain equipment attached to the
line towers was property in the nature of machinery and that the
line towers had no function other than supporting that equipment.
The towers and the equipment were physically connected, and when
it was necessary to replace the equipment, it was often as
economical to replace the inherently permanent tower as well.
Therefore, we decided that the line towers and the equipment were
so closely related that they formed an integral mechanism which
was property in the nature of machinery. Consequently, we held
that the line towers were eligible for an ITC. However, we did
not hold that the line towers were property in the nature of
machinery merely because they were part of the ski lift. Rather,
we based our holding upon the close relationship of the line
towers to the attached equipment, which was itself property in
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011