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property will be depreciated, there would appear to be no
meaningful difference for purposes of the exception in section
1.446-1(e)(2)(ii)(b), Income Tax Regs.
However, the foregoing analogy is complicated by the fact
that, as presently codified in section 168, MACRS inextricably
links recovery period and depreciation method. A
reclassification thus can affect not only the time over which
deductions are taken but also the methodology by which those
deductions are calculated. Such linkage generally did not exist
under earlier statutes2, and previous case law indicates that a
change in depreciation method was not excluded from the consent
requirement. See Standard Oil Co. (Indiana) v. Commissioner, 77
T.C. 349, 410-411 (1981); Casey v. Commissioner, 38 T.C. 357,
384-387 (1962).
Hence, we are faced with a choice. On one hand, to adopt
petitioner’s approach and rule that a reclassification of
property under MACRS should be treated as synonymous with an
adjustment in useful life for purposes of the regulatory
exception would broaden the exception to cover changes not only
in the period for depreciation but also potentially in the method
2 There were some exceptions, see, e.g., former sec. 167(c)
(accelerated depreciation is available only for property with a
useful life of 3 years of more); former sec. 167(j)(5) (sec. 1250
property that is used residential real property qualifies for a
125 percent declining balance method if the property has a useful
life of 20 years or more).
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