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Commissioner, 84 T.C. 739, 745-746 (1985), affd. 803 F.2d 1572
(11th Cir. 1986); Clemente, Inc. v. Commissioner, T.C. Memo.
1985-367. In Kittredge v. Commissioner, supra at 634, the court
said:
To read the phrase "used in the trade or business" as
meaning only active employment of property devoted to
the business would lead to results which we cannot
believe Congress intended. For example, one factory of
a large industrial plant may lie idle for a year, and
in fact suffer depreciation as great, or greater, than
that sustained by the factories in operation. To allow
no depreciation for the idle factory would be most
unfair to the taxpayer, for he must claim the deduction
in his tax return for the year when the depreciation
occurs, and may not take it in a later year. * * *
Hence we think the phrase should be read as equivalent
to "devoted to the trade or business"; that is to say,
that property once used in the business remains in such
use until it is shown to have been withdrawn from
business purposes. * * *
In Piggly Wiggly Southern, Inc. v. Commissioner, supra, we
set forth the requirements for application of the “idle asset
rule” (i.e., that assets may be “placed in service” when not yet
in actual use but in a state of readiness and available for a
specifically assigned function). We identified two necessary
factors: (1) The taxpayers already were engaged in the business
for which they purchased the equipment, and (2) the taxpayers did
all that was in their power to place the equipment into service.
We have already found that CDC was in the contract drilling
business. Furthermore, Eason was in the contract drilling
business and used each of its rigs to drill wells prior to the
years at issue. Thus, the first factor is satisfied. We must
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