Appliances and Equipment

Moveable appliances are among the least controversial personal-property items in a rental study because the regulation names them. Treas. Reg. §1.48-1(c) defines tangible personal property as any tangible property except land and improvements such as buildings or other inherently permanent structures, including structural components. It then lists refrigerators, production machinery, printing presses, grocery counters, display racks, and neon signs as personal property even when contained in or attached to a building. Property in the nature of machinery, such as a gasoline pump or a hydraulic car lift, is personal property even outside a building. Local fixture law does not control.

A building under section 1.48-1(e)(1) is a roofed enclosure used for shelter, housing, or working, office, parking, display, or sales space. Structural components under section 1.48-1(e)(2) include plumbing fixtures such as sinks and bathtubs, electric wiring, lighting fixtures, central HVAC, partitions, floors, ceilings, sprinkler systems, and other components relating to the operation or maintenance of a building. A range is not a sink. A refrigerator is named personal property. The boxes and hood around them may still be building. Hospital Corp. of America held that these tests apply under MACRS. The IRS acquiesced in the legal test, not in every hospital equipment result.

Publication 5653’s residential rental matrix treats kitchen appliances — range, refrigerator, dishwasher, microwave — as section 1245 property in class 57.0. Dedicated appliance branch circuits and dedicated appliance plumbing hook-ups follow those appliances. General kitchen wiring and plumbing, kitchen cabinetry, counters, sinks, and built-in stove hoods remain residential rental building property. Furnished-unit furniture and clubhouse exercise furnishings are also class 57.0 in that table. Those rows are examiner guidance for residential rentals, including houses, condominiums, and apartments as the matrix describes them.

Whiteco’s six permanence factors are a court test for inherently permanent structures, not a statute. They rarely decide a free-standing refrigerator. They matter for a built-in cooktop that is lagged into a counter the residential matrix already treats as building. AmeriSouth allowed appliance outlets among a small set of items and kept most other special claims with 27.5-year apartments. The case is a caution against treating every kitchen finish as an appliance.

Class life still depends on Publication 946 Appendix B after the item is personal property. Class 57.0 is the activity class the residential matrix uses. Manufacturing machinery uses the activity class for that manufacture. Rev. Rul. 2003-81: an item described in both an asset category (00.11 through 00.4) and an activity category generally goes in the asset category unless specifically included in the activity class. Computers may be class 00.12. Office furniture may be class 00.11. Do not drop every machine into 57.0.