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of 5 years for purposes of computing depreciation allowances.
Respondent argues that TRA section 203(b)(2)(A) precludes any
credits for 1988, 1989, or 1990 because the class life of the
nuclear fuel assemblies is less than 7 years. Respondent argues
that TRA section 203(b)(2)(A) mandates that TRA section 204(a)
property must have a class life of at least 7 years before TRA
section 203(b)(2)(C)(ii) is applied to that property. Petitioner
argues that TRA section 203(b)(2)(C)(ii) contains a special
provision that transforms the class life of the fuel assemblies
to 20 years, thus negating the requirement in TRA section
203(b)(2)(A) that TRA section 204(a) property must have a class
life of at least 7 years.106
This same issue of statutory construction with respect to
TRA section 203(b)(2) was addressed by the Court of Appeals for
the Ninth Circuit in Airborne Freight Corp. v. United States, 153
F.3d 967, 971-972 (9th Cir. 1998), revg. on this issue 78 AFTR 2d
6272, 96-2 USTC par. 50,552. The Court of Appeals explained:
This section is not a model of clarity, but we
read the opening restriction of subsection (A),
standing alone, as requiring that the world
headquarters exception [which is another exception
contained in TRA section 204(a)] not be available to
property with a class life of less than 7 years. The
plain words dictate that reading. The difficulty
arises from subsection (C)(ii), which assigns to
property described in � 204(a) a class life of 20
106 Before the trial, respondent moved for partial summary
judgment on this issue. We reserved ruling on this motion and
decide the issue as part of this opinion.
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