The author demonstrates in this Article that a purchaser or heir can acquire from a ground lessor a number of interests in addition to the lessor's interest in the land. In addition, he shows how some of those interests can be depreciated or amortized despite the provisions of sections 167(a)(2) and 197 of the Internal Revenue Code. Finally, to the extent that some of these interests cannot be amortized or depreciated, there occurs a material distortion of the acquiring party's income. The author suggests that sections 167(a)(2) and 197 should be revised to permit amortization or depreciation of these interests so that the material distortion of income does not arise. Part II of this Article describes a hypothetical situation to illustrate how this problem arises. Interests that can be acquired from a ground lessor, other than land, are described in part III. Part IV briefly describes the position of the Internal Revenue Service with respect to the acquisition of interests, other than land, from a ground lessor. The analysis of authorities contained in part V demonstrates that interests, other than land, can be acquired from a ground lessor. Finally, part VI concludes with a discussion of the present treatment of interests, other than land, acquired from a ground lessor.
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