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production”. Id. at 1258. This focus fails to take into
account, and is contrary to, an important aspect of the
regulations authorizing the issuance of Rev. Proc. 87-56, 1987-2
C.B. 674, and its predecessor revenue procedures. The
regulations require not only that property be classified by the
type of activity in which the property is used but also that the
taxpayer depreciating property on the basis of a particular class
life must itself be engaged in (be the actor in) the activity
described in the asset guideline class. Moreover, the Court of
Appeals’ focus fails to take into account the segmented approach
to the natural gas industry taken in Rev. Proc. 87-56, supra.
b. The Regulations
Section 1.167(a)-11(b)(4)(iii)(b), Income Tax Regs., states
that “property shall be included in the asset guideline class for
the activity in which the property is primarily used” and that
“[p]roperty shall be classified according to primary use even
though the activity in which such property is primarily used is
insubstantial in relation to all the taxpayer’s activities.”
(Emphasis added.) Because the regulation considers the
substantiality of the primary use activity in relation to all of
the taxpayer’s activities, we interpret the regulation as
comparing a part to the whole (i.e., one of the taxpayer’s
activities is compared to all of the taxpayer’s activities) so
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