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By way of analogy, this Court in deciding the question of
whether sprinkler heads were an “inherently permanent structure”,
found that the sprinkler heads, although easily removable, were
inseparably attached to an underground water system. Metro Natl.
Corp. v. Commissioner, T.C. Memo. 1987-38. The Court in Metro
Natl. Corp. held that the underground water system and sprinkler
heads were an “inherently permanent structure” and not tangible
personal property within the meaning of section 48(a)(1)(A).
With respect to the irrigation systems, four of the six
factors favored respondent’s position, and two were neutral with
respect to the drip irrigation system. Again, the question of
permanent attachment to the real property is the primary focus of
the factors and asset depreciation classes, and the drip
irrigation systems is more akin to a permanent improvement. The
placement of a substantial portion of the pipe or tubing in the
ground and the difficulty of removing the system are the primary
factors that render the irrigation systems we consider here to be
permanent land improvements.6 See, e.g., Mallinckrodt, Inc. v.
Commissioner, 778 F.2d 402, 403 (8th Cir. 1985), affg. T.C. Memo.
6 We note that some portions of petitioners’ irrigation
systems were above the ground and regularly repaired and/or
replaced. Items such as tubing, emmiters and the like may have
been considered severable from the irrigation systems and not as
land improvements if they had been separately claimed and/or
accounted for. We were, however, presented with the sole choice
of deciding whether the irrigation system, as a whole, was
machinery or a permanent land improvement.
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