Minot Fed. Sav. & Loan Ass'n v. United States

Where this comes from

Minot Federal Savings and Loan installed pre-manufactured partition systems to divide interior office space. The partitions were designed to be assembled and disassembled. They were used as room dividers.

The government argued the partitions were part of the building structure, not separate personal property. The case went to the U.S. District Court in North Dakota, then to the 8th Circuit Court of Appeals.

What the courts decided

Both courts ruled for Minot Federal. The partition systems qualified as tangible personal property eligible for the investment tax credit. They were not permanent structural components of the building.

The key was movability. The partitions could be detached and relocated. They were not built into the walls or permanently bonded to the floor or ceiling. That physical mobility was enough to separate them from the building and put them in the personal property category. The door units built into the partition system went along with the same result.

How it shows up in a study

Minot Federal is the anchor case for movable partition classification. When a cost segregation study reclassifies demountable partition systems, the legal support runs through this case and King Radio, which followed it explicitly.

The practical implication is straightforward. If your building has prefabricated, reconfigurable partition systems, office demountable walls, or other movable dividers, Minot Federal is part of the authority that supports moving their cost to a shorter depreciation class.

The Whiteco factors still apply. A study should document that the partitions are designed for disassembly, that removal does not destroy them, and that they are not structurally bonded to the building shell.

What it does not mean

Minot Federal does not cover all interior partitions. Mallinckrodt drew a clear contrast: drywall construction nailed to studs and destroyed when removed is a structural component. The win in Minot Federal is tied to pre-manufactured systems designed for mobility.

The case also predates Whiteco, which added a more structured six-factor test for permanence. Today, a defensible study documents the Whiteco factors along with the Minot Federal principle. Movability is the core of the argument, but the documentation needs to support it at every point.