In reference to page 9-8 - 5-year property (h) Gasoline Pump Canopies.
Can Gasoline Pump Canopies be used in Section 179 Depreciation?
Can Gasoline Pump Canopies be used in Section 179 Depreciation?
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Rev. Rul. 77-291 examines the issue of whether something is real property, not eligible for Section 179, or tangible personal property, which would be eligible for Section 179. If land improvements are classified as real property, they are not eligible. But if the structure is not categorized as a land improvement, but rather, tangible personal property, then the Section 179 deduction would be allowed.
The whole issue with Gasoline pump canopies being 5 year property as opposed to 15 year property is that in certain cases, it is not considered a land improvement, but rather, it is considered tangible personal property.
IRS Market Segment Specialization Paper #4 for Gas Retailers says:
“Canopies are in Class 57.1 with a 15-year life, unless they qualify under the Whileco test, see above as personal property for Asset Class 57.0 and 5-year depreciation. In JFM, Inc. v. CIR, T.C. Memo 1994-239, the court held canopies to be personal property in Class 57.0, with a 5-year life. The canopies in that case were bolted down onto four to six special concrete footings. Of the 14 canopies at issue, the taxpayer had sold 2 to third parties for reuse, and at least 3 had been taken down and either moved to another location or had been rebuilt and reinstalled at the same location. Thus, some of these canopies had in fact been moved.”
Note that it referred to these canopies as personal property. Using that terminology suggests they would also qualify for Section 179.
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