How is the class life determined for carpeting in a commercial office building for Section 179(d)(5)(B) purposes?
Ask Blue J any tax question, then go deeper. Follow up, add client-specific context, and explore the sources behind every answer with Blue J’s generative AI solution for tax research.
To determine the class life for carpeting in a commercial office building for purposes of Section 179(d)(5)(B), you must follow the rules for classifying property under the MACRS system, which relies on the class life system as set forth in Rev. Proc. 87-56 and as referenced in the Internal Revenue Code and Treasury Regulations.
Step 1: Identify the Asset and Its Use
- The asset in question is carpeting.
- The context is a commercial office building (i.e., nonresidential real property).
Step 2: Locate the Asset in the Class Life Tables
- Under Rev. Proc. 87-56, as incorporated into IRS Publication 946 and the Cost Segregation Audit Technique Guide, assets are classified first by specific asset categories (asset classes 00.11 through 00.4), and if not found there, by activity categories (asset classes 01.1 through 80.0).
- For carpeting, the relevant asset class is 00.11, "Office Furniture, Fixtures, and Equipment," which includes furniture and fixtures that are not a structural component of a building, such as desks, files, safes, and communications equipment. Carpeting is generally considered a fixture and is included in this asset class.
- The IRS Cost Segregation Audit Technique Guide and industry-specific IRS guidance (e.g., for retail, restaurant, and office buildings) consistently classify carpeting as a fixture, not a structural component, and assign it to asset class 00.11.
Step 3: Determine the Class Life
- Asset class 00.11, "Office Furniture, Fixtures, and Equipment," has a class life of 10 years.
- This is confirmed in Table B-1 of IRS Publication 946, which lists "Office Furniture, Fixtures, and Equipment" as having a 10-year class life.
Step 4: Application to Section 179(d)(5)(B)
- The class life for carpeting, as a fixture in a commercial office building, is therefore 10 years.
Step 5: Special Note on Recovery Period
- While the class life is 10 years, the MACRS recovery period for such property is 7 years under the General Depreciation System (GDS), but for Section 179(d)(5)(B) purposes, it is the class life (not the MACRS recovery period) that is relevant.
Summary Table
Conclusion
For Section 179(d)(5)(B) purposes, the class life of carpeting installed in a commercial office building is 10 years, as determined by asset class 00.11 under Rev. Proc. 87-56 and as referenced in section 168(i)(1).
Was this answer helpful?
What Blue J customers are saying
“We are excited to use Blue J to elevate the initial work product our team is able to produce."
"We’re incorporating Blue J to ensure our people are well-equipped with a research tool that delivers on both ease of use and quality of deliverable. It will save us a lot of time as a starting point, so we can focus our efforts on the analysis. Ultimately, it helps us get to the right answer, faster.”
"We’re incorporating Blue J to ensure our people are well-equipped with a research tool that delivers on both ease of use and quality of deliverable. It will save us a lot of time as a starting point, so we can focus our efforts on the analysis. Ultimately, it helps us get to the right answer, faster.”
"We had used Checkpoint for a long time but found it wasn’t particularly well-used in our practice."
"A lot of our practitioners would have to turn to Google to find what they were looking for, which of course isn’t ideal. Blue J is a real game-changer when it comes to this, since it combines the efficiency of Google with the authoritative tax materials our people really need to serve their clients best. At ELO, we pride ourselves on providing services that are focused on value for clients and exceeding their expectations. Adding Blue J to our toolbox will enable us to do just that, as we continue to evolve our service offerings to better serve our clients’ needs.”
"A lot of our practitioners would have to turn to Google to find what they were looking for, which of course isn’t ideal. Blue J is a real game-changer when it comes to this, since it combines the efficiency of Google with the authoritative tax materials our people really need to serve their clients best. At ELO, we pride ourselves on providing services that are focused on value for clients and exceeding their expectations. Adding Blue J to our toolbox will enable us to do just that, as we continue to evolve our service offerings to better serve our clients’ needs.”
"We find this tool to be a game-changer for us and our clients.”
“We had the opportunity to pilot some other AI solutions in the market, and found that the improvement over traditional search was limited - except in Blue J’s case, where the efficiency gain over traditional research methods is significant."
“We had the opportunity to pilot some other AI solutions in the market, and found that the improvement over traditional search was limited - except in Blue J’s case, where the efficiency gain over traditional research methods is significant."
“Blue J is an exciting technology because it enables the practitioner to remain in the driver’s seat of the analysis."
"Thoughtful functions are included to encourage and facilitate deeper analysis, not to replace or reduce it. We’ll continue to find new and impactful ways to leverage the technology, which has benefited our clients and staff alike. At RSM we strive to be compelling to our clients and to be digital by embracing new technologies to fulfill that promise.”
"Thoughtful functions are included to encourage and facilitate deeper analysis, not to replace or reduce it. We’ll continue to find new and impactful ways to leverage the technology, which has benefited our clients and staff alike. At RSM we strive to be compelling to our clients and to be digital by embracing new technologies to fulfill that promise.”
"We wanted to have a tool that people were using at all staff levels."
"We wanted something that lived up on their third screen - something that would be available and helpful to them every day. What we've found is it's been easy to get people to get into the habit of using Blue J because it helps people. Blue J allows us to quickly respond to client questions in a way that they can understand it, which helps us deal with the volume of client questions that come in. We were up and running very quickly with Blue J - within 5 minutes, our staff understood how this will be helpful, and the rest of the training program is refining prompting skills and building use cases and best practices."
"We wanted something that lived up on their third screen - something that would be available and helpful to them every day. What we've found is it's been easy to get people to get into the habit of using Blue J because it helps people. Blue J allows us to quickly respond to client questions in a way that they can understand it, which helps us deal with the volume of client questions that come in. We were up and running very quickly with Blue J - within 5 minutes, our staff understood how this will be helpful, and the rest of the training program is refining prompting skills and building use cases and best practices."
