T.C. Memo. 2003-75
UNITED STATES TAX COURT
GREEN FOREST MANUFACTURING INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1596-01. Filed March 14, 2003.
P is engaged in the business of assembling,
manufacturing, and selling furniture. P depreciated
certain items of equipment used predominantly outside
the United States. In accordance with the modified
accelerated cost recovery system (MACRS), alternative
depreciation system rules, R reclassified certain items
of P’s equipment. The reclassification required a
change in recovery period for all of the reclassified
items of equipment, and a change in depreciation method
for some of the reclassified items of equipment. P
concedes that R’s reclassification is correct.
R determined that reclassification of the items of
equipment is a change in P’s method of accounting that
requires an adjustment pursuant to sec. 481(a), I.R.C.
Held: The change in MACRS classification of the
items of equipment is excluded from the definition of a
change in method of accounting, and an adjustment
pursuant to sec. 481(a), I.R.C., is not required.
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