Petitioners contend that the properties in question qualify as "other tangible property" pursuant to section 48(a)(1)(B). Specifically, 1987 U.S. Tax Ct. LEXIS 42">*61 petitioners argue that the properties are not buildings but, instead, that the properties are used as an integral part of production or, alternatively, that the properties constitute facilities that provide bulk storage of fungible commodities. See sec. 48(a)(1)(B)(i) and (iii). Petitioners bear the burden of proving entitlement to the claimed investment tax credits. Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 463, 87 T.C. 463">488 (1986); Rule 142(a), Tax Court Rules of Practice and Procedure.

Because the statute specifically excludes buildings from investment tax credit and because such a determination would obviate the need for further inquiry, we shall first address whether the refrigerated structures constitute buildings.

The term "building" is defined in section 1.48-1(e)(1), Income Tax Regs., as follows:

(e) Definition of building and structural components. (1) Buildings and structural components thereof do not qualify as section 38 property. The 88 T.C. 744">*756 term "building" generally means any structure or edifice enclosing a space within its walls, and usually covered by a roof, the purpose of which is, for example, 1987 U.S. Tax Ct. LEXIS 42">*62 to provide shelter or housing, or to provide working, office, parking, display, or sales space. The term includes, for example, structures such as apartment houses, factory and office buildings, warehouses, barns, garages, railway or bus stations, and stores. Such term includes any such structure constructed by, or for, a lessee even if such structure must be removed, or ownership of such structure reverts to the lessor, at the termination of the lease. Such term does not include (i) a structure which is essentially an item of machinery or equipment, or (ii) a structure which houses property used as an integral part of an activity specified in section 48(a)(1)(B)(i) if the use of the structure is so closely related to the use of such property that the structure clearly can be expected to be replaced when the property it initially houses is replaced. Factors which indicate that a structure is closely related to the use of the property it houses include the fact that the structure is specifically designed to provide for the stress and other demands of such property and the fact that the structure could not be economically used for other purposes. Thus, the term "building" does 1987 U.S. Tax Ct. LEXIS 42">*63 not include such structures as oil and gas storage tanks, grain storage bins, silos, fractionating towers, blast furnaces, basic oxygen furnaces, coke ovens, brick kilns, and coal tipples.

This regulation was issued pursuant to section 38(b), which authorized the Treasury to "prescribe such regulations as may be necessary to carry out the purposes" of the investment tax credit provisions. It conforms to congressional understanding of the term "building" as described in the legislative history. See H. Rept. 1447, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 405, 516; S. Rept. 1811, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 707, 858-859. It is thus a legislative regulation, almost as binding as the statute itself. Yellow Freight System, Inc. v. United States, 538 F.2d 790">538 F.2d 790, 538 F.2d 790">795-796 (8th Cir. 1976).

The regulation defines "building" in terms of two tests, or a two-part test. The appearance test generally requires a "structure or edifice enclosing a space within its walls, and usually covered by a roof," and the function test generally requires the structure "to provide shelter or housing, or to provide1987 U.S. Tax Ct. LEXIS 42">*64 working, office, parking, display, or sales space," or to provide a similar function. Sec. 1.48-1(e)(1), Income Tax Regs.; Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 479.

Many courts, including this Court, emphasize the function of a structure to determine whether it is a building. See Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 479-480, and 88 T.C. 744">*757 cases cited therein. Other courts, including the Court of Appeals for the Eighth Circuit, to which an appeal in this case would lie, require that a structure satisfy both the appearance test and the function test to qualify as a building. Yellow Freight System, Inc. v. United States, 538 F.2d 790">538 F.2d at 796-798; Illinois Cereal Mills, Inc. v. Commissioner, 789 F.2d 1234">789 F.2d 1234, 789 F.2d 1234">1238 (7th Cir. 1986); A.C. Monk & Co. v. United States, 686 F.2d 1058">686 F.2d 1058, 686 F.2d 1058">1061 (4th Cir. 1982).

In Yellow Freight System, the taxpayer sought investment tax credit for the cost of certain loading docks and inspection lanes. The issue was whether the property qualified as "other tangible property" under section 48(a)(1)(B). 1987 U.S. Tax Ct. LEXIS 42">*65 The District Court applied the function test and allowed the investment tax credit. It concluded that because of the specialized purpose of the property, i.e., that it facilitated the transfer of freight in the taxpayer's transportation business, the structures did not function as buildings under section 48(a)(1)(B). Yellow Freight System, Inc. v. United States, 413 F. Supp. 357">413 F. Supp. 357, 413 F. Supp. 357">367-368 (W.D. Mo. 1975). The Court of Appeals reversed, rejecting the District Court's application of the function test to the extent it ignored the appearance of the structure and to the extent it emphasized the nature of employee activity within the structure without consideration of the amount of human activity within the structure. 538 F.2d 790">538 F.2d at 797. The court stated that the regulation and legislative history require consideration of both appearance and function, that the function test is no less "imprecise" than the appearance test, and that appearance and function are not mutually exclusive, i.e., "a given structure is designed to accommodate the functions for which it is to be used." 538 F.2d 790">538 F.2d at 797-798.

In 1987 U.S. Tax Ct. LEXIS 42">*66 Yellow Freight System, the Court of Appeals applied both tests to the loading docks and inspection lanes and held that they each resembled buildings and functioned as buildings, thus denying investment tax credit to the taxpayer. Specifically, the court found that the property resembled buildings in that (1) they were permanent structures with substantial dimensions, and (2) they were not uniquely designed, or structurally different, from other buildings. (That neither the docks nor the inspection lanes 88 T.C. 744">*758 had clearly discernible walls was not regarded as controlling by the court because the definition in the regulation furnishes only a general description of buildings.) The court also found that the property functioned as buildings in that the property essentially provided shelter and work space for men and equipment. 538 F.2d 790">538 F.2d at 796.

Petitioners argue that the elements persuading the court in Yellow Freight System that the properties therein were buildings are not present in this case, i.e., (1) the refrigerated structures here are uniquely designed and uniquely functional, (2) they do not provide shelter or working space, and (3) to convert1987 U.S. Tax Ct. LEXIS 42">*67 the refrigerated structures to an alternative use would require major structural and building material changes as well as prohibitive costs. Petitioners contend that because of these factors the refrigerated structures are not buildings as that term is defined for purposes of section 48(a)(1)(B).

Applying the appearance test of the regulation as mandated by Yellow Freight System, and Golsen v. Commissioner, 54 T.C. 742">54 T.C. 742 (1970), affd. 445 F.2d 985">445 F.2d 985 (10th Cir. 1971), we conclude that the refrigerated structures in issue resemble buildings. We have examined photographs and blueprints of the structures and have considered the testimony of witnesses; the structures are permanent structures of substantial dimensions which enclose spaces surrounded by walls and covered by roofs. See sec. 1.48-1(e)(1), Income Tax Regs.; Yellow Freight System, Inc. v. United States, 538 F.2d 790">538 F.2d at 796; Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 481.

Petitioners argue that the refrigerated structures do not appear as buildings because of their unique design. We agree that the structures 1987 U.S. Tax Ct. LEXIS 42">*68 were specially designed in order to meet their intended purpose, i.e., to freeze meats and other food products and to provide cold storage for them. These specialized or "unique" features, however, do not alter the building-like appearance of the structure. Although it might be possible for a structure to be so unique in its design that its appearance is not that of a building in the ordinary sense, such is not the case with the refrigerated structures in issue here.

88 T.C. 744">*759 We must next consider whether the refrigerated structures function as buildings. This Court recently applied the function test to determine whether refrigerated structures, similar to the ones in issue here, were buildings. Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 463 (1986). Therein, we reiterated that the function test requires a determination of "whether the purpose of the structure at issue is a purpose ejusdem generis to the purposes described by example in section 1.48-1(e)(1), Income Tax Regs." 87 T.C. 463">87 T.C. 480, citing Consolidated Freightways v. Commissioner, 74 T.C. 768">74 T.C. 768, 74 T.C. 768">795 (1980), affd. on this issue 708 F.2d 1385">708 F.2d 1385 (9th Cir. 1983).1987 U.S. Tax Ct. LEXIS 42">*69 We also stated:

In applying the functional test, a major focus of inquiry is whether the structure provides working space for employees which is more than merely incidental to the primary function of the structure. See, e.g., Brown-Forman Distillers Corp. v. United States, 205 Ct. Cl. [402] at 418, 499 F.2d [1263] at 1271 [Ct. Cl. 1974]; Valmont Industries, Inc. v. Commissioner, [73 T.C. 1059] supra at 1072 [1980]; Scott Paper Co. v. Commissioner, [74 T.C. 137] supra at 178 [1980]; Catron v. Commissioner, [50 T.C. 306] supra at 316 [1968]. In this regard, it is appropriate to consider both the quantity and quality of the human activity within the structure. See Consolidated Freightways, Inc. v. United States, 223 Ct. Cl. [443] at 461, 620 F.2d [862] at 873 [Ct. Cl. 1980]; Consolidated Freightways v. Commissioner, 74 T.C. 768">74 T.C. 795; Satrum v. Commissioner, [62 T.C. 413] supra at 417 [1974]. * * * [Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 480.]1987 U.S. Tax Ct. LEXIS 42">*70

Applying the function test to the refrigerated structure in Munford, we concluded that the structure was not a building:

We think that the principal purpose or function of the refrigerated area is not to furnish working space for petitioner's employees, but rather, to provide an area in which frozen foods may be stored at low temperature. In contrast with the truck and rail loading platforms [also at issue in Munford], the refrigerated area of the Addition is maintained at a temperature which limits, rather than promotes, human activity. Due to the cold temperature, the activities of petitioner's employees are limited in both scope and duration. In the case of the Addition's refrigerated area, the structure itself serves the principal function of low temperature storage of products, and the activities of petitioner's employees are merely supportive of and ancillary to this function. Accordingly, we conclude that the refrigerated portion of the Addition is not a building under the functional test. [87 T.C. 463">87 T.C. 483.]

88 T.C. 744">*760 Petitioners argue that the facts in this case are virtually indistinguishable from those in Munford and that we should1987 U.S. Tax Ct. LEXIS 42">*71 likewise conclude that the structures do not function as buildings. Respondent argues that Munford is inapplicable because, among other things, we there considered whether property was eligible for investment tax credit under section 48(a)(1)(A). Indeed, the analysis in this case clearly falls under section 48(a)(1)(B); however, the regulations and the applicable cases make no distinction in the definition of "building" for purposes of subparagraph (A) or subparagraph (B) of section 48(a)(1). See Munford, Inc. v. Commissioner, 87 T.C. 463">87 T.C. 478 n. 9. We agree with petitioners that the facts are similar and that, in this case, the refrigerated structures do not function as buildings. Although "hot" or fresh meat was sometimes delivered to the facilities to be frozen and then stored, unlike the facts in Munford where the foodstuff was already frozen, the evidence does not indicate that significant human activity, of quantity or quality, took place in the refrigerated structures. The structures did not function as working space for employees and equipment; rather, the refrigerated structures functioned to freeze meat and provide low temperature1987 U.S. Tax Ct. LEXIS 42">*72 storage space for the meat and other food products.

Our conclusion is consistent with the application of the function test in Yellow Freight System, Inc. v. United States, 538 F.2d 790">538 F.2d 790 (8th Cir. 1976). In that case, the Court of Appeals for the Eighth Circuit found that the structures in issue, loading docks and inspection lanes, did not serve the purpose of expediting the transfer of freight but merely provided working space for the employees and equipment performing that function. 538 F.2d 790">538 F.2d at 796. In this case, however, the refrigerated structures performed the function identified, not the employees.

Respondent argues that because we ultimately determined that the structure in Munford was "inherently permanent" and thus ineligible for investment tax credit under section 48(a)(1)(A) and section 1.48-1(c), Income Tax Regs., our determination therein that the structures were not buildings, i.e., did not function as buildings, is dictum and therefore not binding in this case. We disagree. Our 88 T.C. 744">*761 resolution of the building issue in Munford was hardly a mere observation or remark of little bearing on the ultimate1987 U.S. Tax Ct. LEXIS 42">*73 decision. Rather, the building issue was, because of the language of the statute and regulations there in issue, properly a threshold question for consideration. The same is true in this case, although we are applying a different subparagraph of section 48(a)(1).

We have thus concluded that the refrigerated structures resemble buildings and function not as buildings. Because we understand the Court of Appeals for the Eighth Circuit to require that a structure appear and function as a building to be deemed a building under section 48(a)(1)(B), ³1987 U.S. Tax Ct. LEXIS 42">*74 we hold that the refrigerated structures are not buildings. ⁴

1987 U.S. Tax Ct. LEXIS 42">*75 Having concluded that the refrigerated structures are not buildings, we must now determine whether the refrigerated structures, the truck turn-arounds, and the railroad tracks otherwise qualify for investment tax credit under either section 48(a)(1)(B)(i) or section 48(a)(1)(B)(iii).

Petitioners maintain that the refrigerated structures, paved truck turn-arounds, and railroad tracks qualify for 88 T.C. 744">*762 investment tax credit because they were used as an integral part of production within the meaning of section 48(a)(1)(B)(i). The regulations define "production" as follows:

(2) Manufacturing, production, and extraction. For purposes of the credit allowed by section 38, the terms "manufacturing", "production", and "extraction" include the construction, reconstruction, or making of property out of scrap, salvage, or junk material, as well as from new or raw material, by processing, manipulating, refining, or changing the form of an article, or by combining or assembling two or more articles, and include the cultivation of the soil, the raising of livestock, and the mining of minerals. Thus, section 38 property would 1987 U.S. Tax Ct. LEXIS 42">*76 include, for example, property used as an integral part of the extracting, processing, or refining of metallic and nonmetallic minerals, including oil, gas, rock, marble, or slate; the construction of roads, bridges, or housing; the processing of meat, fish, or other foodstuffs; the cultivation of orchards, gardens, or nurseries; the operation of sawmills, the production of lumber, lumber products or other building materials; the fabrication or treatment of textiles, paper, leather goods, or glass; and the rebuilding, as distinguished from the mere repairing, of machinery. [Sec. 1.48-1(d)(2), Income Tax Regs. Emphasis supplied.]

Petitioners argue that the property in issue was used as an integral part of the processing of meat. Petitioners thus contend that the freezing and ultimate storage of meat is a process, i.e., a qualifying activity. Petitioners rely on certain cases, including Giannini Packing Corp. v. Commissioner, 83 T.C. 526">83 T.C. 526 (1984), and Central Citrus Co. v. Commissioner, 58 T.C. 365">58 T.C. 365 (1972), for the proposition that the controlling of atmospheric conditions is essential to the production of agricultural1987 U.S. Tax Ct. LEXIS 42">*77 products and the preparation of such products for shipment.

If we determine that the refrigerated structures were used as an integral part of processing and were therefore eligible for investment tax credit, respondent concedes the investment tax credits for all the truck turn-arounds and for the Millard-DM railroad tracks. Respondent does not, in like manner, concede the investment tax credit for the Millard-D railroad tracks because he contends that the evidence shows that the Millard-D tracks were used only for out-shipments of food, not both in- and out-shipments like the tracks at Millard-DM. See sec. 1.48-1(d)(4), Income Tax Regs. Respondent argues, nevertheless, that neither the freezing nor storage of meat is a process as that term is defined for purposes of section 48(a)(1)(B)(i). Instead, respondent contends 88 T.C. 744">*763 that the freezing and cold storage of meat is simply a "marketing process" (as compared to a qualifying manufacturing or production process) that merely extends the shelf life of the product.

In 83 T.C. 526">Giannini Packing Corp. v. Commissioner, supra, we allowed investment tax credits, holding that rooms in the taxpayer's packing plant1987 U.S. Tax Ct. LEXIS 42">*78 used for cooling apples were an integral part of processing because they prevented the apples from dehydrating and shriveling and were otherwise essential to the taxpayer's production of fresh fruit. In 58 T.C. 365">Central Citrus Co. v. Commissioner, supra, we allowed investment tax credits, holding that taxpayer's "sweet rooms," wherein fruit incurred "degreening" as a result of specific atmospheric conditions involving temperature, humidity, gas, and air-movement control, were an integral part of the taxpayer's production of fresh fruit.

Petitioners offered the testimony of two food experts and respondent offered the testimony of one food expert. Although each expert described a different definition of the term "process," their reports and testimony all indicate that processing brings about a desired change to meet public safety standards or consumer demands. Petitioners' experts predictably state that the freezing of meat and its frozen storage constitute a continuing processing of the meat. They admit that freezing does not enhance the quality of the individual cut of meat but suggest that its value is nevertheless increased. Respondent's expert stated 1987 U.S. Tax Ct. LEXIS 42">*79 that frozen storage of meat is not a process. He further noted, however, that he considered the initial freezing of meat to constitute a process. He thus concluded that the refrigerated structures in question provided two functions: a freezing as a process function and a freezer storage or warehousing function. A problem respondent's expert encountered was how or where to draw the line between these two functions. The facilities do not have separate rooms for the separate functions; instead, both functions occur in the same area(s), and often simultaneously.

Upon consideration of all the facts, including the extensive testimony by the food experts, we conclude that a "process" did not occur at petitioners' refrigerated structures within the meaning of the relevant statute and 88 T.C. 744">*764 regulations. Although we have found the testimony of respondent's expert to be the most persuasive, we believe that the initial freezing function was secondary and merely a necessary step toward the primary function of the refrigerated structures, i.e., low temperature storage.

The cases relied upon by petitioners are distinguishable in that they represent situations where the food product incurred1987 U.S. Tax Ct. LEXIS 42">*80 changes necessary, in those particular circumstances, for providing a desirable or finished product. Such changes included (1) the prevention of dehydration and shrinkage and the removal of ethylene gas in the production of fresh fruit ( 83 T.C. 526">Giannini Pack Corp. v. Commissioner, supra), and (2) the necessary "degreening" of certain fruit ( 58 T.C. 365">Central Citrus Co. v. Commissioner, supra). See also Brown-Forman Distillers Corp. v. United States, 205 Ct. Cl. 402">205 Ct. Cl. 402, 499 F.2d 1263">499 F.2d 1263 (1974), where the maturation of whiskey was determined a process because it aged the whiskey; and Schuyler Grain Co. v. Commissioner, 50 T.C. 265">50 T.C. 265 (1968), affd. 411 F.2d 649">411 F.2d 649 (7th Cir. 1969), where the aeration and drying of grain was determined a process because it improved the quality of the grain for its intended use. The freezing and storage of meat in petitioners' refrigerated structures simply did not render a change in the product consistent with the decided cases. We therefore hold that in this case the freezing and cold storage of meat was not a "processing1987 U.S. Tax Ct. LEXIS 42">*81 of meat" that qualifies for investment tax credit under section 48(a)(1)(B)(i). ⁵

In Loda Poultry Co. v. Commissioner, 88 T.C. 816">88 T.C. 816 (1987), filed this date, we also held that the cold storage of meat was not a "processing of meat" that qualifies for investment tax credit regarding certain compartments in the taxpayer's refrigerated structure. Specifically, investment tax credit was denied for a zero-degree compartment and a 28-degree compartment where storage in such compartments was not part of a qualifying activity. The credit was allowed, however, for a 32-degree compartment. Insofar as that particular compartment is concerned, Loda Poultry is factually distinguishable from this case. The taxpayer in 88 T.C. 744">*765 Loda Poultry was otherwise1987 U.S. Tax Ct. LEXIS 42">*82 engaged in processing meat, i.e., chickens were cut, cleaned, inspected, and packaged in a 55-degree compartment of the structure, and then stored, to prevent spoilage, in the 32-degree compartment as the final step in the on-premises processing before the chickens were sold and shipped out. We therefore concluded that the 32-degree compartment was an "integral part of * * * [taxpayer's] production." See sec. 48(a)(1)(B)(i). In this case, petitioner is not otherwise engaged in what may be considered a qualifying activity, for which storage in any of the refrigerated structures might be deemed a necessary final step.

Petitioners contend that the refrigerated structures were facilities used for the bulk storage of fungible commodities within section 48(a)(1)(B)(iii). That section, however, also requires that such storage be in connection with any of the qualifying activities identified under section 48(a)(1)(B)(i). We have already determined that petitioners' refrigerated structures were not used in a qualifying activity, and the evidence does not otherwise indicate a qualifying activity occurring at petitioners' 1987 U.S. Tax Ct. LEXIS 42">*83 businesses. Petitioners are therefore precluded from investment tax credits under section 48(a)(1)(B)(iii).

Even if the facilities were used in a qualifying activity, petitioners nevertheless fail to qualify for investment tax credit under section 48(a)(1)(B)(iii). The refrigerated structures were not used for the "bulk storage of fungible commodities." Bulk storage is described in section 1.48-1(d)(5)(ii), Income Tax Regs., as follows:

Bulk storage means the storage of a commodity in a large mass prior to its consumption or utilization. Thus, if a facility is used to store oranges that have been sorted and boxed, it is not used for bulk storage.

Applying the regulation to the facts in this case, the meats and other food products, which were boxed and labeled, were not stored in bulk.

In Merchants Refrigeration Co. of California v. United States, 659 F.2d 116">659 F.2d 116 (9th Cir. 1981), investment tax credit 88 T.C. 744">*766 was not allowed where goods stored in the taxpayer's facilities were identified as to individual owner, who segregated the food and retained control over its ultimate disposition. The court held that the goods were not fungible because, among1987 U.S. Tax Ct. LEXIS 42">*84 other things, ownership of such goods was not "in common." Petitioners attempt to distinguish this case but fail. The evidence in this case, including photographs, indicates that the meats and other products were containerized, identified, and segregated by owner. The products therefore were not fungible.

The second issue for consideration is whether the partnerships may use the 200-percent-declining-balance method for computing the allowances for depreciation of the refrigerated structures and truck turn-arounds. The parties agree that our resolution of the investment tax credit issue would also determine this issue. Compare sec. 48(a)(1) with sec. 1245(a)(3). See sec. 1.1245-3(c), Income Tax Regs.

Section 167(b)(2) generally permits taxpayers to use the double-declining-balance method for computing an allowance for depreciation. In the case of "section 1250 property," however, section 167(j)(1) limits the declining-balance method to a rate not exceeding 150 percent. Sec. 167(j)(1)(B). The term "section 1250 property" is defined as "any real property (other than section 1245 property, as defined in section 1245(a)(3))" which is or has been depreciable1987 U.S. Tax Ct. LEXIS 42">*85 under section 167. Sec. 1250(c).

The term "section 1245 property" is defined in section 1245(a)(3) as follows:

(3) Section 1245 property. -- For purposes of this section, the term "section 1245 property" means any property which is or has been property of a character subject to the allowance for depreciation provided in section 167 (or subject to the allowance of amortization provided in section 185) and is either --

(A) personal property,

(B) other property (not including a building or its structural components) but only if such other property is tangible and has an adjusted basis in which there are reflected adjustments described in paragraph (2) for a period in which such property (or other property) --

(C) an elevator or an escalator, or

(D) so much of any real property (other than any property described in subparagraph (B)) which has an adjusted basis in which there are reflected adjustments for amortization under section 169, 185, 188, 190, 193, or 194.

The third issue for consideration is whether the partnerships may compute the allowances for depreciation of the refrigerated structures and railroad tracks based on useful lives of 15 years, as claimed by petitioners, or 33 1/3 years, as determined by respondent. Petitioners bear the burden of proving error1987 U.S. Tax Ct. LEXIS 42">*87 in respondent's determination. Casey v. Commissioner, 38 T.C. 357">38 T.C. 357, 38 T.C. 357">381 (1962).

Section 1.167(a)-1(b), Income Tax Regs., defines "useful life," in pertinent part, as follows:

(b) Useful life. For the purpose of section 167 the estimated useful life of an asset is not necessarily the useful life inherent in the asset but is the period over which the asset may reasonably be expected to be useful to the taxpayer in his trade or business or in the production of his income. This period shall be determined by reference to his experience with similar property taking into account present conditions and probable future developments. Some of the factors to be considered in determining this period are (1) wear and tear and decay or decline from natural causes, (2) the normal progress of the art, economic changes, inventions and current developments within the industry and the taxpayer's trade or business, (3) the climatic and other local conditions peculiar to the taxpayer's trade or business, and (4) the taxpayer's policy as to repairs, renewals, and replacements. Salvage value is not a factor for the purpose of determining useful life. If the taxpayer's1987 U.S. Tax Ct. LEXIS 42">*88 experience is inadequate, the 88 T.C. 744">*768 general experience in the industry may be used until such time as the taxpayer's own experience forms an adequate basis for making the determination. * * *

Respondent's engineering experts examined the refrigerated structures and estimated their useful lives, economic and physical, in the range of 35 to 45 years. Respondent argues that a 15-year useful life is not consistent with the 33 1/3-year useful life claimed by the partnerships for other structures and building improvements, i.e., docks, mezzanines, and offices, and that petitioners rely solely on the testimony of petitioner Larry Larsen.

The quoted regulation, however, indicates that the best source for determining useful life is the taxpayer's own experience, if any. Petitioner Larry Larsen, unlike respondent's experts, has constructed and maintained refrigerated structures for approximately 25 years. He testified that the structures incur substantial wear and tear, especially the roof and the insulation. He also noted that technological advances render certain of the specialized materials obsolete in a matter of years. Although respondent's experts disagreed with petitioner Larry1987 U.S. Tax Ct. LEXIS 42">*89 Larsen, we were nevertheless more persuaded by his testimony. His testimony as to the useful life of such structures was articulate, credible, and more convincing. The useful life of the refrigerated structures is thus 15 years for purposes of computing the allowance for depreciation.

Respondent correctly notes that petitioners offer no evidence regarding the useful life of the railroad tracks; moreover, petitioners' briefs are silent on the issue. Petitioners have thus failed to meet their burden of proof, and respondent's determination as to the useful life of the railroad tracks must be sustained.

Decisions will be entered under Rule 155.