Plumbing: Plumbing consists of pipes, fittings, gaskets, traps, drains, valves, pumps, gauges, brackets and connectors. These items were installed specifically for use with the personal property to which they relate. Absent the existence of these items, the personal property would be inoperable.
Revenue Ruling 69-558, 1969-2, C.B. 4 states: “…electrical wiring and special outlets (and plumbing lines) …leading directly to, within, and interconnecting with items of machinery or equipment are not parts of the electrical (and plumbing systems), but are parts of the particular items of machinery or equipment to which they directly lead, are within, or interconnect…” In Hospital Corporation of America and Subsidiaries v. Commissioner, 109 TC 21 (1997), the Tax Court reaffirmed its decision in Scott Paper Co. v. Comm., 74 TC 137 (1980) and Morrison Inc. v. Comm., No. 34300-83, TCM 1986-129, March 31, 1986 stating that it found no material differences between the facts in the Hospital Corp. Case and those facts presented in its earlier decisions. In Morrison Inc. v. Comm., the court focused on the use of the special purpose plumbing and concluded that it did not relate to the operation and maintenance of the building and therefore could not be a structural component in accordance with Reg. Sec. 1.48-1(e)(2). The court concluded instead, the special purpose plumbing was part of the Section 1245 property to which it related. In Scott Paper Co. v. Comm., the court indicated: “items occurring in unusual circumstances that do not relate to the operation or maintenance of the building should not be considered as structural components even though specifically listed as such in Reg. Sec. 1.48-(e)(2)” The court held the critical test to be whether the improvements related to the overall operation or maintenance of the building. The court concluded that the special purpose plumbing should be considered an extension of the Section 1245 property to which it relates.
See also Rev. Rul. 69-558, 1969-2, CB. 4; Rev. Rul. 66-299, 1966-2, c. B. 14; Central Citrus Co. v. Commissioner, 58 TC 365 (1972); Duaine v. Commissioner, T. C. Memo 1985-39; Texas Instruments v. Commissioner, TCM 1992-306. Accordingly, the coffee station, break areas and cafeteria plumbing requirements are accessory to the appliances and cabinet stinks, and thus, qualify as Asset Class #57.0 (Distributive Trades and Services) for tax depreciation purposes.