- 15 -
and the applicable convention. Sec. 168(a); Hospital Corp. of
Am. v. Commissioner, 109 T.C. 21, 45 (1997). Only the applicable
recovery period is at issue.
Property with 39-year recovery period is nonresidential real
property.20 Sec. 168(c). Nonresidential real property is
defined as “section 1250 property which is not-- (i) residential
rental property, or (ii) property with a class life of less than
27.5 years.” Sec. 168(e)(2)(B). Section 1250 property is any
real property (other than section 1245 property, as defined in
section 1245(a)(3)) which is or has been subject to the
depreciation allowance under section 167. Sec. 1250(c). Real
property, as used in section 1250(c), includes land, improvements
thereto, including a building or its structural components, and
other real property except that which is defined in section
1245(a)(3)(B)-(F). Sec. 1.1250-1(e)(3)(i), Income Tax Regs.
Respondent concedes petitioner used the $80,000 to purchase
an asset and “petitioner’s records included documentation, at
least at one time, indicating that the check was, in fact, paid
to purchase equipment”. Mr. Reeves credibly testified that the
20 MACRS generally classifies eligible personal property and
certain real property as 3-year property, 5-year property, 7-year
property, 10-year property, 15-year property, or 20-year property
and assigns that property to a corresponding recovery period on
the basis of the property’s class life. Sec. 168(c), (e)(1),
(3). MACRS generally classifies real property as residential
rental property or nonresidential real property, assigning
recovery periods of 27.5 years and 39 years, respectively. Sec.
168(c), (e)(2).
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: November 10, 2007