Asset Classification Index

The tests that actually decide class

Treas. Reg. §1.48-1(c) defines tangible personal property by exclusion: it is tangible property other than land, buildings, inherently permanent structures, and structural components. Local fixture law does not control. Examples in the regulation include production machinery, printing presses, transportation and office equipment, refrigerators, grocery counters, display racks, and signs. Property in the nature of machinery — a gasoline pump, a hydraulic car lift, an automatic vending machine — remains tangible personal property even if it is outside a building.

Treas. Reg. §1.48-1(e)(2) lists structural components: walls, partitions, floors, ceilings, permanent coverings, windows, doors, all components of a central air-conditioning or heating system, plumbing and plumbing fixtures, electric wiring and lighting fixtures, chimneys, stairs, escalators, elevators, sprinkler systems, fire escapes, and other components relating to the operation or maintenance of a building. The sole-justification exception removes certain machinery from that list when it is installed only to meet temperature or humidity needs of other machinery or of processing. Incidental employee comfort does not destroy the exception if it is insubstantial.

Whiteco’s six factors decide whether something that is not on the structural-component list is still an inherently permanent structure. Scott Paper’s functional allocation decides how much of a shared electrical system is a structural component. Hospital Corporation of America holds that those ITC-era tests still apply under MACRS; Action on Decision 1999-008 agrees with that legal conclusion and disagrees with many of the hospital item results. A CostSeg SI asset page that cites HCA for a kitchen sink in a rental is using the legal test, not the hospital fact pattern.

Unit of property under Treas. Reg. §1.263(a)-3 is a different question. That regulation splits a building into a structure and listed building systems for repair-versus-improvement analysis. It does not assign a five-year class to a fire-alarm panel. An asset page may mention unit of property when a reader is trying to decide whether a replacement is a repair; it should not treat the unit-of-property list as a depreciation classification table.

Electrical and lighting

Specialized electrical systems, general electrical distribution, dedicated equipment wiring, decorative and specialty lighting, and general building lighting. Scott Paper-style load analysis matters here; so does the difference between a house panel and a kitchen or process panel.

General building power, lighting, HVAC, and convenience outlets are the structural-component baseline in Treas. Reg. §1.48-1(e)(2). Dedicated branch circuits, disconnects, and outlets that serve a specific machine or appliance can follow the equipment when the facts show they are necessary to and used directly with that equipment. Publication 5653 Chapter 8.A discusses functional allocation of primary and secondary electrical distribution by design or demand load. The guide says a properly applied allocation should not be challenged; it also limits that comment to primary and secondary distribution, not to every conduit in the building.

Lighting splits on function. General building lighting that relates to operation or maintenance of the building is listed as a structural component. Decorative or specialty lighting that is not the primary light source, and lighting that is accessory to a business display or process, is where Whiteco and the industry matrices diverge. The restaurant and retail matrices treat some decorative lighting as personal property; that row is not a rule for an office lobby. The lighting pages in this library keep those matrix rows labeled by industry.

Mechanical, interiors, and equipment

Plumbing fixtures and specialty plumbing; HVAC and climate control; specialized ventilation; flooring and floor coverings; carpeting and specialty flooring; cabinetry and millwork; appliances; restaurant kitchen equipment; medical and specialty equipment.

Central HVAC, building plumbing, and building fixtures sit on the structural-component list. Dedicated kitchen, process, or medical-gas lines, equipment exhaust, and air makeup that exists solely for equipment are the usual §1245 candidates, subject to the facts. The restaurant matrix says allocation of HVAC is not appropriate and points instead at separate kitchen units that meet the sole-justification test. That is a narrower rule than “split the tonnage.”

Floor covering is fact-intensive. The retail, restaurant, and residential-rental matrices treat strippable VCT, sheet vinyl, and carpeting as not permanent in those industries. The pharmaceutical matrix treats some permanently adhered covering as a structural component. Ceramic tile, wood, and epoxy that are permanently affixed are the usual building rows. Cabinetry and millwork split between built-in casework that relates to the building and readily removable decorative or retail millwork. Appliances and restaurant or medical equipment are the easier personal-property calls when they are not built-in structural components — and the harder ones when they are plumbed, wired, or enclosed as part of the building.

Life safety, data, site, and structure

Security and access control; fire protection; telecommunications and data wiring; interior partitions and decorative features; landscaping and irrigation; parking lots, sidewalks, and paving; fencing and site features; roofing and structural components; plus a page on evidence and documentation.

Fire-protection and building-security systems are listed building systems under Treas. Reg. §1.263(a)-3 and are structural-component baseline items under Treas. Reg. §1.48-1(e)(2). The retail matrix carves out electronic article surveillance that protects merchandise rather than the building. Site security gates and parking-control equipment often follow land-improvement class 00.3 in the matrices that mention them. Those rows are examiner guidance, not a statute.

Site work is usually class 00.3 land improvements — sidewalks, roads, drainage, fences, landscaping — excluding buildings and structural components, as Publication 946 Appendix B reproduces from Rev. Proc. 87-56. Land itself is not depreciable. General grading that prepares a site can be land. Landscaping that would be destroyed when a related depreciable asset is replaced is the usual 00.3 fact pattern; landscaping that would remain is often land. Parking lots are 00.3. Stand-alone parking structures are buildings.

The evidence page is the counterpart to this index. It explains photographs, panel directories, as-builts, pay applications, and unit-cost citations as support for a classification, not as the classification. A CSI Division 26 heading on a pay application can bundle house wiring and equipment wiring on one line. That line is a cost-source problem, not a five-year election.