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Pub. L. 97-34, 95 Stat. 172, which enacted the accelerated cost
recovery system (ACRS). Then, as part of the Tax Reform Act of
1986, Pub. L. 99-514, secs. 201, 203, 100 Stat. 2122-2123, 2143,
Congress replaced ACRS with a modified accelerated cost recovery
system (MACRS), effective generally for property placed in
service after December 31, 1986, and section 168 was amended
accordingly.
Under MACRS, assets are placed into 1 of 10 classes. See
sec. 168(c), (e). Classifications are assigned either according
to class life or, for certain types of property, by the nature of
the asset. See id. The classification of an item under MACRS
determines two critical elements in calculating the allowable
depreciation: (1) The applicable depreciation method (200
percent declining balance, later switching to straight line; 150
percent declining balance, later switching to straight line; or
straight line), and (2) the applicable recovery period (the
period over which depreciation deductions are taken). See sec.
168(a), (b), and (c). As pertinent here, two of the available
MACRS classifications are 15-year property and nonresidential
real property, which differ both in the required depreciation
method and in the mandated recovery period. See id.
II. Contentions of the Parties
The parties in this matter do not dispute, and have
stipulated, that petitioner’s gas stations are assets of a nature
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