119 T.C. No. 12
UNITED STATES TAX COURT
CLAJON GAS CO., L.P., AQUILA GAS PIPELINE CORP.,
TAX MATTERS PARTNER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15968-97. Filed October 25, 2002.
Partnership C owned and operated natural gas
gathering systems to transport gas purchased from
natural gas producers. C treated certain pipeline and
related components of the gathering systems as natural
gas production assets within asset class 13.2 of Rev.
Proc. 87-56, 1987-2 C.B. 674, with a 7-year recovery
period.
Held: Because C’s use of its gathering systems
determines the proper asset class, and because C was
not a “natural gas producer”, the components in
question are not within asset class 13.2; rather, they
are used by C to transport gas and are, therefore,
within asset class 46.0, with a 15-year recovery
period. We shall follow our decision in Duke Energy
Natural Gas Corp. v. Commissioner, 109 T.C. 416 (1997),
revd. 172 F.3d 1255 (10th Cir. 1999).
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