Is Property Reclassification under MACRS an Accounting-Method Change?
The Tax Court recently decided that a reclassification of properties under the modified accelerated cost recovery system (MACRS) was not an accounting-method change under Sec. 446, because it was excepted by regulation (Brookshire Bros., TC Memo 2001-150). It is uncertain whether the IRS will acquiesce in this decision. Until its response is known or additional cases are decided, taxpayers that want to make a MACRS class-life reclassification should consider protecting their positions by filing both a request for an accounting-method change and amended returns. Facts Beginning in September 1991, Brookshire Bros. began to build gas station properties accessible through the parking lots of certain of its grocery stores. The company classified the gas stations as nonresidential real property with 31.5- or 39-year recovery periods on its 1993 1995 returns. In 1996, the company filed amended returns for those years, reclassifying the gas stations as 15-year property, citing an IRS Industry
