Specialized Millwork
Theme and decorative millwork is treated as personal property in the restaurant matrix. Finish carpentry that completes an apartment often stayed with the building in AmeriSouth. Ornament is not a recovery class by itself. Whiteco permanence factors are a court test, not a statute. Educational information, not tax advice.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Publication 5653 matrices split decorative millwork from general millwork such as doors, frames, stairs, and trim.
- Restaurant decorative millwork and non-structural theme elements are treated as class 57.0 personal property in that matrix.
- AmeriSouth treated much finish carpentry and millwork as part of garden-apartment buildings.
- King Radio allowed a movable partition system; L.L. Bean treated an integrated rack structure as a building.
- Shop drawings should show whether the millwork is load-bearing and how it is attached.
Millwork ranges from a restaurant’s themed host stand to door casings that finish a residential unit. Treas. Reg. §1.48-1(e)(2) lists walls, partitions, floors, ceilings, permanent coverings such as paneling or tiling, windows, and doors as structural components, plus other components relating to the operation or maintenance of a building. Decorative paneling that is a permanent covering is on that list. Theme carpentry that does not operate the building is the restaurant-matrix personal-property row. Tangible personal property still excludes buildings and inherently permanent structures. Local fixture law does not control.
Whiteco’s six questions are the court test for inherent permanence. They are not a statute. A lattice screen that unbolts may look like Whiteco’s readily removable signs. Crown molding nailed around every apartment opening looks like a permanent covering. Hospital Corp. of America applied section 1.48-1 under MACRS. AmeriSouth XXXII, Ltd. v. Commissioner kept most millwork and finish carpentry with 27.5-year apartments. The restaurant matrix goes the other way for decorative millwork and non-structural theme elements. Both can be right on their facts. Courts split on woodwork that looks similar in a photograph.
Publication 5653 matrices labeled “Millwork – Decorative” and “Millwork – General” are examiner guidance. Decorative millwork that enhances décor and is unrelated to building operation is treated as personal property in restaurant, retail, and some other tables. General millwork — doors, frames, stairs, and trim that complete the building — is building. Casino false façades and storefronts that are not structural are treated as personal property in that table. Pharmaceutical decorative millwork is described as personal property with no class life, recovered over seven years in that row. Do not export a restaurant theme-element row into a dwelling, or an apartment casing row into a themed dining room, without saying you are analogizing.
King Radio held that movable, non-load-bearing office partitions fastened with small screws were tangible personal property and that Rev. Rul. 69-14 misconstrued congressional intent to the extent it treated movable partitions as structural components. L.L. Bean held that a high-rise storage rack that also supported roof and walls was an inherently permanent structure even though it was theoretically movable. Specialized millwork sits between those poles. If the carpentry is the wall, it is a partition. If it is a removable theme piece, the restaurant decorative row is closer.
Boddie-Noell denied investment credit for items listed as structural components, including mansard roof panels on those restaurant facts, and rejected thin estimates. Shoney’s allowed decorative lighting, not millwork as such, and the IRS nonacquiesced in that lighting result. Decorative is not a synonym for five-year. The file has to show function and attachment.
Decorative versus general millwork in the guide
The decorative row is for items that would not be needed to operate or maintain the building. The general row is for doors, frames, stairs, handrails, and trim that complete openings and circulation. Fireplaces are building in the restaurant matrix. A host stand that is a piece of theme furniture is closer to a fixture. A reception desk that forms a corridor wall is closer to a partition.
AmeriSouth as a residential caution
The garden-apartment study in AmeriSouth broke the purchase into more than a thousand components, including finish carpentry and millwork. Most contested items were structural components of those apartments. The case does not hold that cost segregation is invalid. It holds that labeling woodwork “special” does not move it out of the dwelling. Residential kitchen cabinets, discussed on the cabinetry page, are building in the residential matrix for the same reason.
Permanence is a court test
Whiteco asks whether the item can be moved, whether it was designed to stay, how long it is expected to stay, how hard removal is, how much damage removal causes, and how it is affixed. Rev. Rul. 2003-54 applied those factors to gasoline pump canopies. Apply them to millwork only after identifying whether the piece is a covering, a partition, a door, or a theme element. The regulation list still comes first for doors and permanent paneling.
Do not use electrical allocation on millwork
Scott Paper load allocation is not a millwork method. Publication 5653 confines examiner acceptance of functional allocation to primary and secondary electrical distribution. Costing millwork from a residual leftover after the building is priced is the residual-estimation approach the guide describes as simpler and potentially less accurate.
Shop drawings and photographs
Show whether the millwork is load-bearing, how it is attached, and whether it is part of the original building package. Publication 5653 Chapter 4 expects a legal citation for each class and a reconciliation to cost. Super Intelligence extraction is a proposed description, not an operational claim. This page is educational information, not tax advice.
Sources
- 1IRS 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.
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