Interior Partitions and Decorative Features
Treas. Reg. §1.48-1 lists partitions among structural components. King Radio treated a movable, non-load-bearing system as personal property. Metro National allowed some partitions and denied atrium storefront walls. Restaurant theme elements are personal property in that matrix; apartment millwork often stayed with the building in AmeriSouth. Educational information, not tax advice.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Section 1.48-1(e)(2) lists walls and partitions, and permanent coverings such as paneling or tiling, as structural components.
- King Radio held that a movable partition system fastened with small screws was tangible personal property, not a structural component.
- Metro National distinguished movable gypsum partitions from atrium storefront walls; toilet partitions are listed as section 1250 in the audit guide’s table for that case.
- Publication 5653 treats room-dividing partitions as building regardless of height, and readily removable reusable partitions as personal property.
- Courts split on the same asset category depending on whether the partition is the building’s space plan or a reusable system.
A partition can be the building’s space plan or a piece of furniture that happens to be tall. Treas. Reg. §1.48-1(e)(2) lists walls, partitions, floors, and ceilings, as well as any permanent coverings therefor such as paneling or tiling, among structural components. Tangible personal property excludes those items. 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.
King Radio Corp. v. United States, 486 F.2d 1091 (10th Cir. 1973), is the leading movable-partition opinion. The system was non-load-bearing, stored when not in use, and fastened with small screws or nails into aluminum channels. Relocation caused only small holes. The Tenth Circuit held it was tangible personal property and that Rev. Rul. 69-14 misconstrued congressional intent to the extent it treated movable partitions as structural components. The IRS later acquiesced in that circuit decision, as Publication 5653 notes. Ordinary taped-and-painted gypsum that divides rooms is not that system.
Metro National Corp. v. Commissioner, T.C. Memo. 1987-38, allowed movable gypsum drywall partitions and storefront corridor partitions as personal property, and treated storefront walls between an atrium and offices as structural. Toilet and restroom partitions are listed as section 1250 in the audit guide’s table for that case. AmeriSouth kept most interior finishes with apartment buildings. Publication 5653 matrices state that partitions dividing rooms or controlling traffic are building regardless of height, while readily removable and reusable partitions are personal property. Restaurant non-structural theme elements and casino false façades are personal property in those tables. Courts have split on partitions because some are the wall of the building and some are a relocatable system.
Whiteco’s six permanence factors are a court test, not a statute: whether the item can be and has been moved; whether it is designed to remain permanently; expected length of affixation; difficulty of removal; damage on removal; and manner of affixation. King Radio is a permanency case in that tradition. L.L. Bean shows the other pole: an automated rack that also supported roof and walls was a building even though theoretically movable. Decorative millwork is not a partition; see the millwork page. Shoney’s allowed decorative lighting, and the IRS nonacquiesced. Fireplaces are building in the restaurant matrix.
Scott Paper electrical allocation does not classify walls. Do not percentage-split drywall by tenant turnover and call it functional allocation. Publication 5653 Chapter 8.A limits that method to primary and secondary electrical distribution.
What the matrices mean by “regardless of height”
A pony wall that directs retail traffic can still be a structural partition in the examiner tables if it is the building’s circulation plan. Height is not a personal-property switch. The personal-property row is for systems that are readily removable and reusable, in the King Radio sense, not for every wall shorter than the ceiling.
Restroom partitions
Restaurant restroom partitions are building in that matrix. Metro National’s audit-guide table lists toilet partitions as section 1250. Stainless or plastic laminate does not create a five-year class by itself. If a study claims restroom partitions as personal property, it needs facts that look like a relocatable system, not a typical bathroom layout.
Decorative features alongside partitions
Theme millwork, false storefronts, and decorative lighting are separate rows and separate cases. They can be personal property when they do not operate the building. They can be building when they are permanent coverings, doors, or occupancy lighting. Photograph whether the feature is load-bearing and whether removal exposes the weather envelope. Boddie-Noell treated mansard roof panels as listed structural components on those restaurant facts.
Whiteco applied to interior construction
If the partition has been moved, is stored, and leaves only screw holes, King Radio and Whiteco both cut toward personal property. If it is in the original architectural plan, taped into the ceiling grid, and would require reconstruction of finishes to remove, Metro National’s atrium walls and AmeriSouth’s apartment finishes cut toward the building. No single factor controls.
Documentation
Architectural plans, photographs of connections at floor and ceiling, and a note on whether the system has been relocated belong in the file. Publication 5653 Chapter 4 expects a legal analysis and a cost reconciliation. Super Intelligence extraction is proposed. This page is educational information, not tax advice.
Sources
- 1Metro National Corp. v. Commissioner, T.C. Memo. 1987-38(opens in a new tab)
IRS written determination that summarizes the decision.
- 2
- 3IRS Publication 5653 — Cost Segregation Audit Techniques Guide (rev. 2-2025)(opens in a new tab)
Written for IRS examiners. The guide states it is not an official pronouncement of law and cannot be cited as authority. It predates the July 2025 law.
- 4
- 5
- 6
- 7
- 8
- 9
- 10