What are Tangible Personal Properties in a Cost Segregation

[Shelon Hutchinson]

Tangible Personal Property

In Reg. 1.48-1{c}, the IRS defines tangible personal property as “any tangible property except land and improvements thereto, such as buildings or other inherently permanent structures (including items which are structural components of such buildings or structures).”

When segregating the assets, the Cost Seg engineer uses the six identifiers created by the IRS to establish permanency which determines if an asset is a structural component and not personal property.           

1) Is the property capable of being moved, and has it in fact been moved?

2) Is the property designed or constructed to remain permanently in place?

3) Are there circumstances, which tend to show the expected or intended lengths of affixation, i.e., are there circumstances, which show that the property may or will have to be moved?

4) How substantial of a job is the removal of a property and how time-consuming is it? Is it “readily removable”?

5) How much damage will the property sustain upon its removal?

6) What is the manner of affixation of the property to the land?