Knowledge Hub
Court cases
Named decisions and issue indexes that were source-checked. Four captions explain the decision that was found, and say when it is not a cost-segregation case.
Showing 29 of 29 pages.
- Court casesPrimary legal authority
Hospital Corporation of America v. Commissioner
The Tax Court held that investment-tax-credit tests still decide whether hospital building items are personal property or structural components under ACRS and MACRS. The IRS later agreed with that legal test, not with the item-by-item results.
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Whiteco Industries, Inc. v. Commissioner
The Tax Court set out six questions for deciding whether property is an inherently permanent structure or tangible personal property. Those questions are a Tax Court test, not a statute, and they remain the usual permanence analysis in cost segregation.
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Commissioner v. Idaho Power Co.
The Supreme Court held that depreciation on equipment a taxpayer uses to build its own capital assets must be capitalized into the cost of those assets. It is a basis case, not a MACRS classification case.
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Commissioner v. Lincoln Savings and Loan Association
The Supreme Court held that a required additional premium paid into an FSLIC secondary reserve, in which the institution kept a pro rata interest, was a capital outlay and not a current §162(a) expense.
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L.A. Darling Co. v. Commissioner
No federal income-tax opinion was found under the company name L.A. Darling Co. v. Commissioner. The nearest federal depreciation decision with the Darling name is Jay N. Darling v. Commissioner, 4 B.T.A. 499 (1926), which denied automobile depreciation for a nonbusiness use and found a 15-year life for a cartoonist's studio. It does not classify building components.
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Massey Motors, Inc. v. United States
A 1960 Supreme Court useful-life and salvage case about automobiles held for short periods and then resold. It is historical background. MACRS later replaced useful-life depreciation for most tangible property.
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Sperry and Hutchinson Co. v. Commissioner
No federal depreciation decision was found under Sperry and Hutchinson Co. v. Commissioner. The opened Sperry & Hutchinson tax case is a 1974 Oregon Supreme Court decision on whether interest from the company's investment securities is apportioned to Oregon. It does not classify building components.
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Clemens v. Commissioner
Clemens v. Commissioner, T.C. Memo. 1989-205, decides whether a Port Authority police officer could exclude sick-leave pay under section 104(a)(1). The pay came from a labor agreement, not from a workers' compensation statute. The case does not classify building components or depreciable equipment.
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Estate of Walling v. Commissioner
The Third Circuit reversed in part a Tax Court holding that barge-repair costs incident to a stock transfer were capital. Repairs made necessary by the partnership’s own prior operation were deductible. The case is historical put-versus-keep law, not a building-classification opinion.
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Scott Paper Co. v. Commissioner
The Tax Court allocated a pulp mill’s primary electrical improvements between building use and production-machinery use based on design load. That functional-allocation holding is the leading electrical case in cost segregation, and it is limited to electrical distribution on those mill facts.
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Plainfield-Union Water Co. v. Commissioner
The Tax Court allowed a deduction for cleaning and cement-lining a tuberculated water main. The comparison was to the main’s condition before the corrosion, not only to its damaged state. The case is pre-regulation repair law.
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Simon v. Commissioner
The Tax Court and the Second Circuit allowed ACRS depreciation on 19th-century Tourte violin bows used by professional musicians, without a separate showing of determinable useful life. The case is about instruments under ACRS, not buildings.
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Metro National Corporation v. Commissioner
A Tax Court memorandum opinion classified partitions, lighting, cabinets, ceilings, and sprinkler heads in rental office and medical buildings item by item under the investment tax credit. Similar-looking items went both ways on the facts.
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Alamo Broadcasting Co. v. Commissioner
A 1950 Tax Court case allocating a lump-sum radio-equipment purchase, characterizing a diesel-generator loss, and depreciating leasehold improvements over the lease plus renewal. It is historical useful-life law, not a structural-component or intangibles case.
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Yellow Cab Co. v. Commissioner
Yellow Cab Co. v. Commissioner, 35 T.C. 791 (1961), denied a Charlotte taxicab company excess-profits-tax relief under section 722 of the 1939 Code. A different case, Yellow Cab Co. of Pittsburgh v. Driscoll, 24 F. Supp. 993 (1938), held that stored cabs stayed depreciable while still devoted to the business. Neither case classifies building components.
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Structural Components Decisions
Courts treat walls, floors, ceilings, and systems that serve the building as structural components, generally recovered with the building. HCA applied that definition under MACRS. AmeriSouth shows how often apartment components stay there.
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Personal Property Decisions
Cases that treated items as tangible personal property rather than structural components used the regulation, the Whiteco questions, and — on some interiors — a movability record. Winning items in one building are not a checklist for another.
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Building Systems Decisions
Courts and the tangible property regulations treat HVAC, plumbing, electrical, elevators, and fire protection as building systems rather than as a pile of removable parts. Dedicated branches can be analyzed separately; the main system often stays with the building.
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Electrical Installation Decisions
Scott Paper allowed a load-based split of a mill primary electrical system. Morrison adopted that approach in the Eleventh Circuit. A.C. Monk rejected allocation in the Fourth Circuit. Dedicated equipment circuits are the usual study focus.
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Plumbing and HVAC Decisions
Central plumbing and HVAC are listed structural components. Dedicated kitchen, medical, or process hook-ups are where studies and the IRS industry matrices draw a line. Courts have not adopted a Scott Paper-style allocation of those systems as an IRS-accepted method.
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Specialized Equipment Decisions
Production machinery, medical equipment, and kitchen equipment are the regulation’s core examples of personal property. Foundations, racks, and hook-ups follow the equipment only when the facts support it. Integration with the building can pull equipment-like items back into §1250.
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Land Improvement Decisions
Site work is often 15-year property. Land is not depreciable. Courts have applied the Whiteco questions to signs, vineyard systems, lawn sprinklers, and apartment site features — with results that split on the facts.
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Decorative Features Decisions
Ornamental lighting and theme millwork have gone both ways. Shoney’s allowed decorative chandeliers on a restaurant record; the IRS nonacquiesced. AmeriSouth kept apartment millwork, mirrors, and unproved “decorative” fans with the buildings. Function and permanence still control.
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Functional Interdependence Decisions
Whether two items work as one asset can affect unit-of-property and placed-in-service questions. Scott Paper’s load split is functional allocation of electrical cost — a different idea. L.L. Bean shows integration with the building. FedEx discussed interdependence in a repairs case about aircraft engines.
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Permanent Attachments Decisions
Whiteco’s six questions decide whether an affixed item is an inherently permanent structure. They are a Tax Court test, not a statute. How something is bolted down is evidence, not the whole inquiry. L.L. Bean and King Radio mark opposite ends of the same scale.
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Cost Estimation Evidence Decisions
When original invoices are missing, studies estimate costs. Both classification and numbers have to be proved. Boddie-Noell rejected after-the-fact percentages. AmeriSouth rejected most of an aggressive takeoff. Peco held that a later study cannot override a binding written §1060 allocation.
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Depreciation Basis Decisions
Idaho Power requires capitalizing self-construction costs into basis. Peco Foods bound a buyer to a written purchase-price allocation. Massey and Alamo are historical useful-life law. Simon is ACRS history about instruments, not buildings.
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Repairs and Capitalization Decisions
Building work today is tested under Treas. Reg. §1.263(a)-3. Lincoln Savings and INDOPCO are the Supreme Court capitalization cases. Plainfield-Union, Walling, and FedEx are older repair opinions that supply vocabulary, not the current building rule.
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Reviewed Case Index
An index of the court decisions CostSeg SI has source-checked for this library, with weight and limits noted. It is not a complete survey of all depreciation cases, and it is not titled “recent” because the core opinions are decades old.
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