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incorporate the class lives that had been set under section 168.
See Rev. Proc. 87-56, 1987-2 C.B. 674.
Under Rev. Proc. 87-56, 1987-2 C.B. at 677, asset class 00.3,
Land Improvements:
Includes improvements directly to or added to land,
whether such improvements are section 1245 property or
section 1250 property, provided such improvements are
depreciable. Examples of such assets might include
sidewalks, roads, canals, waterways, drainage
facilities, sewers * * * , wharves and docks, bridges,
fences, landscaping, shrubbery, or radio and television
transmitting towers. * * *
Under Rev. Proc. 87-56, Asset Class 01.1--Agriculture:
Includes machinery and equipment, grain bins, and fences
but no other land improvements, that are used in the
production of crops or plants, vines, and trees; * * * .
The definitions provided in Rev. Proc. 87-56, supra, do not
specifically denominate or classify trellises, drip irrigation
systems, or wells, and, accordingly, we must decide the category
or class life in which these assets most properly fit. Generally,
the class life categories cover two broad groupings--permanent
improvements to real property, and machinery and equipment that is
not a real property improvement.
The “Whiteco” Factors
The question of whether property is a permanent improvement
to land has long been a subject of tax controversy. There are
innumerable depreciation and investment tax credit cases where
this very question has been addressed. The parties here sought
guidance from one such case where this Court decided whether a
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