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¶3570-Uniform Capitalization Rules §263A
Offshore jacket-type platforms used for oil drilling are "real property" under §263A; production period begins when actual physical construction on the platform is first performed, the Chief Counsel's Office advised.
Oil and gas producers must build massive permanent offshore platforms in order to produce oil and gas from offshore reservoirs. One type of platform used is a rigid structure referred to as a steel jacket platform or jackettype platform. The platform is primarily made of steel and is designed to withstand severe weather for an indefinite period. The platforms are generally not reused and removing a platform from a site often damages it so extensively that it cannot be...