- 18 -
Rev. Proc. 87-56, 1987-2 C.B. 674, 686, sets forth the class
lives to be used when computing depreciation allowances under
section 168. Asset class 57.0, entitled “Distributive Trades and
Services”, assigns a 5-year recovery period to “section 1245
assets used in marketing petroleum and petroleum products”.
Asset class 57.1, entitled “Distributive Trades and Services–-
Billboard, Service Station Buildings and Petroleum Marketing Land
Improvements”, assigns a 15-year recovery period to “section 1250
assets, including * * * depreciable land improvements, whether
section 1245 property or section 1250 property, used in the
marketing of petroleum and petroleum products”. Section 1245
property includes storage facilities used in connection with the
distribution of petroleum and petroleum products. Sec.
1245(a)(3)(E).
Both parties agree that the tanks are used in the marketing
and distribution of petroleum and petroleum products and,
therefore, should be classified under either asset class 57.0 or
asset class 57.1. The parties also agree that, in order to
properly classify the tanks, we must decide whether the tanks
constitute inherently permanent structures using the six factors
articulated in Whiteco Indus., Inc. v. Commissioner, 65 T.C. 664,
672-673 (1975). Petitioner concedes that section 7491 does not
apply to shift the burden of proof to respondent. See also Rule
142(a)(1).
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011