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provides that the depreciation allowance “does not apply to
inventories or stock in trade".
The period for depreciation begins "when the asset is placed
in service". Sec. 1.167(a)-10(b), Income Tax Regs. Section
1.167(a)-11(e)(1)(i), Income Tax Regs., provides in relevant
part:
The term “first placed in service” refers to the time
the property is first placed in service by the
taxpayer, not to the first time the property is placed
in service. Property is first placed in service when
first placed in a condition or state of readiness and
availability for a specifically assigned function
* * *
This and other courts have recognized that taxpayers may
claim depreciation deductions under the so-called idle asset rule
in situations where the asset involved, while not in actual use
during the year in issue, nevertheless was devoted to the
business of the taxpayer and ready for use should the occasion
arise. See P. Dougherty Co. v. Commissioner, 159 F.2d 269 (4th
Cir. 1946) (for purposes of determining whether depreciation was
allowable for years when barges lay idle for protracted periods
during a 20-year period, it was sufficient that they were kept in
usable condition and were ready for use should the occasion
arise), affg. 5 T.C. 791 (1945); Kittredge v. Commissioner, 88
F.2d 632 (2d Cir. 1937); Piggly Wiggly Southern, Inc. v.
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