- 127 -
years. The district court read subsection (C)(ii) as
establishing a 20-year class life for all � 204(a)
property, thus entirely negating the 7-year-minimum
requirement of subsection (A) of � 203(b)(2). We
conclude that a more appropriate reading of subsection
(C)(ii) is to consider it as "treating" � 204(a)
property (which must have a class life of 7 years or
more) as having a 20-year life for the purpose of the
applicable date by which it must be placed in
service-January 1, 1991. We recognize that this
interpretation may negate the provision of subsection
(A) with regard to such property with a life of at
least 7 but less than 20 years. The district court's
interpretation does even more violence to subsection
(A), however, because it negates not only the same
provision, but virtually all of subsection (A).
Our interpretation of � 203 is made more
compelling by the fact that � 203 does not stand alone.
It is supplemented by � 49(e)(1)(C), which provides in
pertinent part:
(C) [I]n the case of transition property with a
class life of less than 7 years-
(i) section 203(b)(2) of this Act shall apply, and
(ii) in the case of property with a class life-
(I) of less than 5 years, the applicable
date shall be July 1, 1986, and
(II) at least 5 years, but less than 7
years, the applicable date shall be January
1, 1987. * * *
26 U.S.C. � 49(e)(1)(C). Here again, the draftsmanship
leaves much to be desired, but the most reasonable
reading of this subsection is that it renders
additional property eligible for the investment credit,
and for practical purposes adds it to the table of
class lives and service dates contained in �
203(b)(2).5 See H.R. Conf. Rep. No. 99-841, 99th
Cong.2d Sess., at II-54. If the district court's
reading of subsection 203(b)(2)(C) were accepted,
however, it would give all � 204(a) property a life of
20 years and entirely negate the above provisions of �
49(e)(1)(C).6 We adhere to our conclusion, therefore,
Page: Previous 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 NextLast modified: May 25, 2011