Blue Power and Light Corporation is an energy company. It produces electricity, sells wholesale and...

Question

Blue Power and Light Corporation is an energy company. It produces electricity, sells wholesale and retail electricity, and delivers electricity to customers. Blue also provides street and highway lighting and area lighting for public and private entities. The equipment used to provide street and area is called streetlights. Blue wants to know the appropriate asset class to determine the cost recovery deductions for the streetlights.

On Thomson-Reuters Checkpoint, do a keyword search of primary source materials using the following search string: “street lights” & “asset class”. You should find a court case that provides an answer to the problem.
Submit a tax file memorandum with proper citations of all sources: I want to see citations of the court case, a revenue procedure, and a specific section of the IRC.

David · Accepted Answer

November 28, 2012
TAX FILE MEMORANDOM
FROM  XYZ, CPA 
TO  BLUE POWER AND LIGHT CORPORATION 
SUBJECT APPROPRIATE ASSET CLASS TO DETERMINE THE COST RECOVERY 
DEDUCTION FOR STREET LIGHTS 
Blue Power and Light Corporation is an energy corporation has requested for assistant in 
determining the cost recovery deduction for street lights associated with their tax return. 
Blue Power and Light Corporation produces electricity and sells to the wholesalers and 
retailers. The company also provides street, highway and area lighting to the public and 
private entities. The company sells streetlights without electricity. It used to provide 
lighting services and not to distribute electricity. Hence,

Blue Power and Light Corporation is an energy company. It produces electricity, sells wholesale and retail electricity, and delivers electricity to customers. Blue also provides street and highway...

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