Leo and Evelyn Trentadue - Page 13

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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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