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15-Year Depreciation on Truck Service Station

The Internal Revenue Service has recently issued an internal legal memo (ILM) dealing with truck service stations and depreciation deductions. In this ILM, the IRS has determined that a building which houses a truck service station qualifies for a 15-year write-off under the MACRS depreciation rules and Asset Class 57.1 of Rev Proc 87-56, 1987-2 CB 674.

Internal legal memo (ILM)

This revenue procedure defines property qualifying for the 15-year write-off as, “truck service station buildings, property used in petroleum and petroleum product marketing, car wash facilities, depreciable land improvements and billboards.” In this ILM the IRS further defines a truck service center as, “a service center that includes service bays in which the taxpayer provides maintenance services for trucks, such as, front-end alignments, oil changes, mechanical work, and other truck repair services.”

It is important to note that this ILM dealt with a specific set of facts relating to a taxpayer who was able to demonstrate that the truck service center took up approximately 84% of the floor space of the building with the remaining space being occupied by an office. Since an ILM is an internal IRS document and is not to be relied upon or cited as precedent, it is important that each taxpayer’s facts are evaluated before electing to use this 15-year write-off.

If after evaluating your specific set of facts it is determined that you do not meet these qualifications, then the building will be treated as nonresidential real property with a 39-year recovery period.

Should you have any questions regarding the above please feel free to e-mail us at ConstructionServices@Withum.com.

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