Functional interdependence Sample Clauses

Functional interdependence. Com- ponents of real property produced by, or for, the taxpayer, for use by the tax- payer or a related person are function- ally interdependent if the placing in service of one component is dependent on the placing in service of the other component by the taxpayer or a related person. In the case of property pro- duced for sale, components of real property are functionally inter- dependent if they are customarily sold as a single unit. For example, the real property components of a single-family house (e.g., the land, foundation, and walls) are functionally interdependent. In contrast, components of real prop- erty that are expected to be separately placed in service or held for resale are not functionally interdependent. Thus, dwelling units within a multi-unit building that are separately placed in service or sold (within the meaning of § 1.263A–12(d)(1)) are treated as func- tionally independent of any other units, even though the units are lo- cated in the same building.