Leo and Evelyn Trentadue - Page 12

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          makers, it is petitioners’ understanding that the industry has              
          treated trellising and drip irrigation systems as equipment                 
          depreciable over 7 to 10 years.  In Sonoma County, California,              
          grapevines become subject to property tax 4 years after planting,           
          whereas trellises, stakes, and irrigation systems are subject to            
          such tax beginning in the year of installation.                             
               The parties disagree about whether trellising, irrigation              
          systems, or a well are to be classified as machinery or land                
          improvements for purposes of depreciation.  A depreciation                  
          deduction is allowed for the exhaustion, wear and tear, and                 
          obsolescence of property used in a trade or business.  Sec.                 
          167(a).1  To some extent, the recovery period determines the                
          amount of the depreciation deduction.  Sec. 168.  The recovery              
          period is based on the “class life” of the property.  Sec.                  
          168(c), (e).  There is no question in this case about whether the           
          subject assets are depreciable.                                             
               For purposes of this case, “class life” is the asset                   
          guideline class in which such property is classified under Rev.             
          Proc. 83-35, 1983-1 C.B. 745, and restated in Rev. Proc. 87-56 to           

               1 Unless otherwise specified, section references are to the            
          Internal Revenue Code as amended and in effect for the years                
          under consideration.  Rule references are to this Court’s Rules             
          of Practice and Procedure.                                                  

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