Floating Vinyl Flooring

[ap5261786]

I want to know why I am not able to depreciate Floating vinyl flooring over in my rental property.  The floor is not attached to the property as per manufacture's installation instructions.  It is less attached than carpet which uses tac strips to hold it down.  Can you tell me where the irs say how to depreciate this flooring.

[taxmodern]

Floating vinyl flooring that is floating or otherwise easily removed is depreciable on a 5 year schedule (just as carpet is).  See Hospital Corporation of America v. Commissioner, 109 T.C. No. 2 (1997):

"Applying the Whiteco criteria, we conclude that the vinyl floor coverings are not inherently permanent. We are persuaded that the floor coverings were not intended to be, and were not, permanent coverings for the buildings' floors. The floor coverings were attached with adhesives to permit easy removal without damage to the concrete floors. Indeed, much of the floor coverings was removed within 3 to 5 years of their installation without damaging the underlying floors or vinyl floor coverings.  Accordingly, we hold that the vinyl floor coverings constitute tangible personal property, and that they are depreciable over a 5–year recovery period."

[taxmodern]

That is interesting to note that, and I appreciate the additional info on that.  I'm reading the overview of the situation now in the IRS Cost Segregation Audit Technique Guide, which outlines the history of it and how we arrived at our present guidelines.  With the AOD, the IRS acquiesced that these types of items could be classified as 1245 property, but they continued to disagree "with the court’s determination with respect to the various disputed properties".  True.  But that case did establish that the factors that predate ACRS/MACRS from the Whiteco Industries case still apply under ACRS/MACRS.  And those factors include the "Inherently Permanent Test", looking at how easily is the item removed, how permanently is it attached, and how much damage will the property sustain if it's removed.  

Using those factors, there is some question when it's a glued down floor, and then it gets to be a question as to how permanent the adhesive is or isn't.   But when it's a floating vinyl floor (I'm assuming they mean it's the type that doesn't use adhesive, which isn't actually attached to the building at all!), I don't think there is any question that it qualifies as easily removeable 5 year property.   As far as I know, I don't think that's come up in another tax court case, but it is now routinely classified as 5 year property on residential cost segregation studies.