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.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Under ACRS, wear and tear in business use could support depreciation without a separate useful-life showing.
- The court contrasted played bows with art that is merely displayed — do not treat Simon as depreciation of collectibles in general.
- Do not cite Simon for classifying a wall, HVAC unit, or land improvement.
- Educational information, not tax advice.
Case record
- Court
- U.S. Tax Court; aff’d, U.S. Court of Appeals for the Second Circuit
- Citation
- 103 T.C. 247 (1994), aff’d, 68 F.3d 41 (2d Cir. 1995)
- Decision date
- 1995-10-13
- Facts
- Richard and Fiona Simon, first-violinists with the New York Philharmonic, bought two nineteenth-century François Tourte bows in 1985 for $30,000 and $21,500. They used the bows regularly in concerts and rehearsals. The Tax Court found that frequent professional use subjects a bow to wear and that a “played out” Tourte bow still has collector value. By 1990 the bows were appraised at $45,000 and $35,000. On their 1989 return the Simons claimed ACRS deductions of $6,300 and $4,515. The parties stipulated those amounts if depreciation was allowable.
- Issue
- Under ACRS, must a taxpayer prove a determinable useful life before depreciating tangible personal property that is used in a trade or business and suffers wear and tear?
- Holding
- No. ACRS recovery property was tangible property of a character subject to depreciation, placed in service after 1980, and used in a trade or business or held for the production of income. Wear and tear in professional use was enough. The Second Circuit affirmed, Judge Oakes dissenting.
- Reasoning
- Judge Winter read §168 with §167(a). Some business property — a painting hung only to be looked at, or an unused bow in a museum — is not subject to wear. The Simons’ bows were. ERTA replaced useful-life matching with statutory recovery periods and eliminated salvage in order to stimulate investment and end useful-life fights. A House conference remark about assets without determinable useful lives (land, goodwill, stock) did not reimport Treas. Reg. §1.167(a)-1 into ACRS. Collectible appreciation and remaining value after use did not bar depreciation. The court distinguished displayed art and humidity-controlled museum pieces that do not wear in the business.
- Relevance to cost segregation
- Simon is background on why statutory recovery periods replaced Massey-style useful-life proof. It is not a building or structural-component case and has low relevance to cost segregation of real estate. It says nothing about Treas. Reg. §1.48-1.
Simon v. Commissioner, 103 T.C. 247 (1994), aff’d, 68 F.3d 41 (2d Cir. 1995), is a musicians’ ACRS case. The Commissioner argued that antique bows which appreciate as collectibles cannot be recovery property unless the taxpayer proves a determinable useful life. The Tax Court and the Second Circuit disagreed. The bows were tangible, placed in service after 1980, used every week in a profession, and physically worn by that use.
The appellate opinion is careful about what it is not. A law-firm painting that hangs on a wall to be admired does not suffer wear and tear in the trade. A Tourte bow locked in a collection and never played would not have been recovery property in a for-profit museum. The Simons’ bows had survived in unused condition precisely because they had not been played; once they entered daily orchestra use, they became “played out” even if collectors would still pay more than cost.
Massey is the contrast case. Before ERTA, useful life and salvage were how the Code matched cost to the taxpayer’s period of use. ACRS assigned statutory lives and dropped salvage so that those fights would stop. Requiring a useful-life trial for every antique desk or instrument would, the majority said, bring back the regime Congress tried to leave. Judge Oakes dissented, reading the conference report as retaining a determinable-life requirement.
For building cost segregation the lesson is modest and easy to overstate. MACRS class assignment, not a private useful-life study, drives current depreciation of tangible property. That does not mean every valuable item in a building is 5-year property, and it does not mean art hanging in a lobby is depreciable. Simon never reaches walls, HVAC, or land improvements. Treat it as ACRS history with low relevance to real estate.
This page is educational information, not tax advice. The property was placed in service under ACRS (1981–1986 rules as then in force). Super Intelligence is described on this site only as a proposed workflow, not as an operational classifier of instruments or buildings.
Income-forecast and art
The Second Circuit did not apply the income-forecast method and did not hold that fine art depreciates. It held that these bows, used as tools and worn in performance, were recovery property. A displayed artwork that is not exhausted, worn, or obsolete in the business would still fail the wear-and-tear predicate the court used.
Limits
The facts are musical instruments, not real estate. Do not cite Simon to classify a structural component or to argue that appreciation bars, or guarantees, depreciation of building personal property.
How a study should use the case
Use Simon with Massey as bookends of the useful-life story. Massey matched automobile cost to the period the taxpayer actually kept the cars. Simon said ACRS no longer required a separate useful-life trial for tangible personal property that wore in a trade or business. MACRS still assigns statutory classes. Neither case decides whether a lobby painting, a wall, or a chiller is 5-year property.
The Second Circuit contrasted played Tourte bows with displayed art and unused museum pieces. Collectible appreciation did not bar depreciation of the bows; it also did not turn every valuable object into recovery property. Low relevance to buildings is the reason this page stays short on real-estate application.
Educational information, not tax advice. The property was placed in service under ACRS.
Verification. Verified from the Justia text of 68 F.3d 41 (argued June 13, 1995; decided October 13, 1995), which recounts 103 T.C. 247 (filed August 22, 1994).