Section 910, General
Internal Revenue Manual
Specialized Industry Guidelines - Timber
Section 910, General
Last amended: 6-26-1978
General
(1) The examiner will need to determine that property used for computing investment credit qualifies as "Section 38 Property" as defined in Regulations 1.46-3(a)(1) and 1.48-1. Timber industry is similar to other manufacturing concerns, in that the major problem area is "other tangible property." "Other tangible property" does not include a building and its structural components but is qualified property if such property is used as an integral part of manufacturing or is a storage facility used in connection with manufacturing. In general, sawmill buildings do not qualify for investment credit. Qualified property does, however, include dry-kiln structures and green-storage sheds.
(2) The agent should be alert when reviewing new acquisition that a proper allocation has been made between buildings (and its structural components) and tangible personal and other tangible property.