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.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Decorative intent does not automatically make an item personal property.
- Shoney’s South treated decorative chandeliers and lanterns as personal property where other fixtures supplied general light; the IRS issued AOD 1986-48.
- Metro allowed some decorative and security lighting and denied lay-in ceiling lighting. AmeriSouth denied apartment “decorative” lights that were not proved to be special lighting.
- Educational information, not tax advice.
Ornament is not a recovery class. Treas. Reg. §1.48-1(e)(2) still asks whether the item is a wall, ceiling, lighting fixture, or other component relating to operation or maintenance of the building. Senate report language about special lighting and removable decorative items is the opening some taxpayers use. Courts require a record, not an adjective.
Shoney’s South, Inc. v. Commissioner, T.C. Memo. 1984-413, is the leading decorative-lighting citation in the audit guide. Restaurant chandeliers and hanging lanterns (75 to 500 pounds) were held not reasonably permanent, and not the building’s general lighting, because separate recessed fixtures supplied that light. The IRS nonacquiesced (AOD 1986-48). The inventory URL for Shoney’s returned an unavailable page on this pass, so this library does not add details beyond the audit-guide table and later opinions that describe it. AmeriSouth cited Shoney’s for the idea that a five-to-seven-year replacement cycle can support non-permanence — and then held that AmeriSouth had not proved such a cycle.
Metro National allowed decorative and security lighting on an office-and-medical record and denied false ceilings with lay-in lighting. AmeriSouth refused decorative treatment for recessed lights, spots, and paddle-fan fixtures when the taxpayer offered no evidence of a decorative or security purpose and its own expert called a fan light general illumination. Dining-room mirrors “had no function” according to the taxpayer’s witness and stayed with the buildings. Finish carpentry and millwork — crown molding, chair rail, cabinets, countertops — were structural on that apartment record even though they were also decorative.
Hospital Corporation of America treated easily removable vinyl wall covering as not a permanent wall covering on a hospital record, as later described in IRS FSA 200203009. Duaine v. Commissioner, T.C. Memo. 1985-39, is listed in the audit guide for ornamental light fixtures held §1250 and for kitchen tile held §1250; that memorandum was not opened here and is not quoted. Theme millwork in restaurants is listed as §1245 in the restaurant matrix; restroom accessories, partitions, and fireplaces are building in that same matrix.
Expect challenge on decorative lighting because of the Shoney’s nonacquiescence. Super Intelligence is proposed only. This page is educational information, not tax advice.
Source limits
The Shoney’s holding is taken from the IRS audit guide’s case table, AmeriSouth’s discussion, and a docket listing. The full memorandum opinion was not retrieved. Duaine remains an audit-guide table citation only.
Building type
A restaurant chandelier with separate general lighting is not an apartment paddle fan. AmeriSouth evaluated décor against garden apartments (flag F-11). Do not export a restaurant-matrix millwork row into a multifamily study as if it were a holding.
How to use this page
Ask what the item does besides look expensive. If it is the room’s general light, a permanent wall covering, or millwork that protects walls and floors, AmeriSouth and the regulation list are the caution. If it is special lighting with a separate general system, Metro and the audit-guide description of Shoney’s are the comparison — with the IRS nonacquiescence attached to Shoney’s.
HCA’s vinyl wall covering, as later described in FSA 200203009, was easy to strip and was not treated as a permanent covering on that hospital record. Duaine’s ornamental fixtures are an audit-guide table row only. Do not quote Duaine as an opened opinion. Decorative intent is evidence, not a class life.
Educational information, not tax advice.
Limits and flags
Shoney’s inventory URL did not open. Keep that chandelier holding at the audit-guide and AmeriSouth description; do not invent weights, counts, or replacement cycles beyond what those sources already state. The IRS nonacquiescence (AOD 1986-48) is enough reason not to treat restaurant decorative lighting as always personal property.
AmeriSouth judged apartment millwork, mirrors, and fans against garden apartments (flag F-11) and has no named inventory URL (flag F-21). Metro’s decorative-lighting win is a memorandum result summarized from FSA 200203009. Theme millwork in a restaurant matrix is examiner guidance, not a holding that apartment crown molding is 5-year property (flag F-10).
Super Intelligence is proposed only. Educational information, not tax advice.
Practice note
Ask two lighting questions before you write a class. What else lights the room? And is there a decorative or security purpose on the record? Metro allowed decorative and security lighting and denied lay-in general lighting. AmeriSouth denied apartment spots and fan lights that were not proved to be special lighting. Shoney’s, as later described, had a separate recessed general system — and the IRS nonacquiesced.
Millwork is worse for adjectives. Crown molding, chair rail, cabinets, and counters that protect walls and floors stayed with AmeriSouth’s apartments even though they were also decorative. Restaurant-matrix theme millwork is examiner guidance for restaurants, not a multifamily holding. HCA’s strippable vinyl, as later described in FSA 200203009, is a hospital covering fact, not a wallpaper rule. Duaine’s ornamental fixtures remain an audit-guide table row only and are not quoted as an opened opinion. Educational information, not tax advice.
Sources
- 1
- 2Metro National Corp. v. Commissioner, T.C. Memo. 1987-38(opens in a new tab)
IRS written determination that summarizes the decision.
- 3
- 4
- 5IRS 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.