Telecommunications and Data Wiring

Data wiring is not named in the 1960s structural-component list, so later guidance and cases matter. Treas. Reg. §1.48-1(e)(2) still lists electric wiring among structural components relating to the operation or maintenance of a building. Tangible personal property excludes structural components. A building is a roofed enclosure used for shelter, housing, or working, office, parking, display, or sales space. Local fixture law does not control. Hospital Corp. of America held that these tests apply under MACRS. The audit guide’s HCA table lists television and telephone equipment and wiring among items treated as section 1245 in that case. The IRS did not adopt the item results.

Publication 5653’s residential rental matrix treats data cable and wiring — phone, internet, cable or satellite television, Wi-Fi — serving equipment that is not a structural component as class 57.0 personal property. AmeriSouth allowed cable, phone, and data outlets among a small set of items in garden apartments and kept most other special-electric claims with the buildings. Those are examiner guidance and a memorandum opinion, not a statute that every office backbone is five-year property.

Whiteco’s six permanence factors are a court test for inherently permanent structures. Conduit encased in concrete scores as permanent on several factors. A patch cord does not. Horizontal cable in accessible tray is removable with little building damage and still has to be identified by what it serves. King Radio’s movable partitions show that readily removable interior systems can be personal property. L.L. Bean shows that theoretical movability does not save an item that is the building’s structure.

Class life, if the cable is personal property, follows Publication 946 and Rev. Rul. 2003-81. Asset class 00.11 includes communications equipment that is not a structural component. Activity class 57.0 is what the residential matrix uses for apartment data cable. An item described in both an asset category and an activity category generally goes in the asset category unless specifically included in the activity class. Do not write that all low-voltage cable is five-year property as a rule.

Scott Paper functional allocation applies to primary and secondary electrical distribution in Publication 5653 Chapter 8.A. It is not an IRS-accepted method for allocating a mixed low-voltage plant between building fire-alarm cable and tenant data cable by percentage. Identify dedicated runs. Fire-alarm and security cable that protects the building is discussed with those building systems under Treas. Reg. §1.263(a)-3. AmeriSouth’s allowed data outlets were a narrow apartment result; they do not convert an office backbone into class 57.0 without a function analysis.