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transtackers. The top surface of the concrete slab under the
racks is constructed with an F100 or "superflat" finish, which is
smoother and more level than a conventional concrete floor. The
concrete slab floor, although modified for design considerations,
is still clearly a structural component of the Reserve Facility.
Petitioner has provided no meaningful method to allocate any
portion of the total expense of the concrete slab floor to the
cost of the superflat finish. Rule 142(a).
3. Roof and Wall Panels
Petitioner contends that, even if the roof and the wall
panels might otherwise constitute parts of a building, these
items still qualify for an ITC under section 1.48-1(e)(1)(ii),
Income Tax Regs., which excludes from the term "building":
a structure which houses property used as an integral
part of an activity specified in section 48(a)(1)(B)(i)
if the use of the structure is so closely related to
the use of such property that the structure clearly can
be expected to be replaced when the property it
initially houses is replaced. * * *
Petitioner argues that the exception provided in section
1.48-1(e)(1)(ii), Income Tax Regs., applies here, because if the
racks were to be replaced, the roof and the walls would also have
to be replaced. However, petitioner does not contend that it
participates in any activity specified in section 48(a)(1)(B)(i).
Rather, it argues that the same tests apply in determining
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