Classification of Property

Office of Chief Counsel
Internal Revenue Service
Memorandum
Number: 200835032
Release Date: 8/29/2008
CC:ITA:B07:JPHuffman
PRESP-105045-08
Third Party Communication: None
Date of Communication: Not Applicable
UILC: 168.20-00 date: August 27, 2008 to: Deputy Area Counsel (Industry Programs)
LMSB Area 3, Retail, Food, Pharmaceuticals & Healthcare from: Branch Chief, Branch 7, CC:ITA:7
(Income Tax & Accounting) subject: Chief Counsel Advice on Ethanol Plant Depreciation
On December 14, 2007, the office of the Associate Chief Counsel (Income Tax &
Accounting) issued Chief Counsel Advice (CCA 200814025) addressing the appropriate depreciation classification of assets used in an integrated facility for converting corn (a biomass) to bioethanol (a liquid fuel). Our advice concluded that the appropriate depreciation classification of these assets under Rev. Proc. 87-56 (1987-2 C.B. 674) is Asset Class 49.5, Waste Reduction and Resource Recovery Plants. Upon further consideration, the Internal Revenue Service and the Department of Treasury think that this issue is better addressed through the published guidance process. Accordingly, CCA 200814025 is not to be followed for determining appropriate tax depreciation deductions.
Please call (202) 622-4930 if you have any further questions.
GEORGE BLAINE
Associate Chief Counsel
(Income Tax & Accounting)
Kathleen Reed
By: ____
Kathleen Reed
Branch Chief, Branch 7
(Income Tax & Accounting)