SECTION 6. CONVERTED AND

DUAL-USE PROPERTY

.01 Converted Refueling Property . (1) In general . The rules in this section 6.01 apply solely with respect to converted QAFV refueling property. For this purpose, converted QAFV refueling property is QAFV refueling property that was converted from property (including conventional refueling property) that is not QAFV refueling property (non-QAFV property).

(2) Reconditioned or rebuilt property . If converted QAFV refueling property is treated under the principles of § 1.48–2 as reconditioned or rebuilt property, the cost of the QAFV refueling property includes the cost of reconditioning or rebuilding the

non-QAFV property, but does not include the basis of the non-QAFV property.

(3) Use as QAFV refueling property treated as original use . If converted QAFV refueling property, including any parts that were non-QAFV property before the conversion, is treated under the principles of § 1.48–2 as being put to original use when first used as QAFV refueling property, the cost of the QAFV refueling property includes both the adjusted basis of the non-QAFV property immediately before the conversion and the cost of the conversion.

.02 Dual-Use Property . (1) In general . In the case of dual-use property that is used to store and/or dispense both alternative fuel and conventional fuel, the cost of the dual-use property is taken into account in computing the Refueling Property Credit only to the extent such cost exceeds the cost of equivalent conventional refueling property. For this purpose, equivalent conventional refueling property is conventional refueling property that is not used to store and/or dispense alternative fuel, but is otherwise comparable to the dual-use property and can store and/or dispense the same amount of conventional fuel as the dual-use property.

(2) Storage facilities . In the case of dual-use property that is used both to store alternative fuel that is dispensed into the fuel tanks of motor vehicles at the location of the storage facility and to store fuel that is transported to other locations, the cost of the dual-use property is taken into account in computing the Refueling Property Credit only to the extent such cost exceeds the cost of a storage facility that is equivalent to the dual-use property except that it is used for the sole purpose of storing alternative fuel that is transported to other locations and can store the same amount of alternative fuel as the dual-use property stores for transport to other locations.