Medical and Specialty Equipment

A CT scanner is machinery. Treas. Reg. §1.48-1(c) includes production machinery and testing equipment as tangible personal property even when contained in or attached to a building, and it includes property in the nature of machinery 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 walls, floors, central HVAC, plumbing fixtures, electric wiring, lighting fixtures, sprinkler systems, and other components relating to the operation or maintenance of a building. The machine can be personal property while the room remains the building.

Hospital Corp. of America & Subs. v. Commissioner, 109 T.C. 21 (1997), is the foundational MACRS classification opinion. The Tax Court held that former investment-credit tests still decide section 1245 versus section 1250. It then classified hospital items one by one and found many to be personal property. The IRS acquiesced in the legal test in AOD 1999-008 and expressly disagreed with the item classifications as factual. A later clinic study cannot treat the HCA schedule as a catalog. Publication 5653 calls HCA the decision that supplied legal support for cost segregation studies and still warns that item results were not adopted.

There is no healthcare matrix in Publication 5653. The closest examiner table is pharmaceutical and biotechnology. That table treats clean-room enclosing walls, floors, and ceilings as building, and HEPA, special air handlers, process power, and special water, gas, and waste systems as personal property with an activity-class life. Specially designed equipment foundations can be personal property; increased thickness alone is not sufficient. Applying those rows to a medical office is analogy, which the guide itself flags as a limit of each matrix.

Whiteco’s six permanence factors are a court test for inherently permanent structures. They matter for shielding, trenches, and platforms. Texas Instruments Inc. v. Commissioner, T.C. Memo. 1992-306, treated specially constructed and reinforced concrete floors that supported machinery as part of the machinery on those manufacturing facts. L.L. Bean distinguished that holding where a rack system also supported roof and walls and was therefore a building. AmeriSouth kept most special systems with apartments. Courts split on built-in work around equipment depending on whether the construction is the machine’s foundation or the building’s floor.

Scott Paper and Morrison allocated mixed electrical systems by design load. Publication 5653 Chapter 8.A limits examiner acceptance of that functional allocation to primary and secondary electrical distribution. Do not allocate medical-gas piping or a mixed air handler by electrical load and describe the method as IRS-accepted. Dedicated equipment circuits are shown by homeruns. Sole-justification HVAC, if claimed, needs a separate unit and the regulation’s essential-to-machinery test.