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Rev. Proc. 72-10


Rev. Proc. 72-10; 1972-1 C.B. 721

DATED
DOCUMENT ATTRIBUTES
  • Cross-Reference

    (Also Part I, Section 167.)

  • Language
    English
  • Tax Analysts Electronic Citation
    not available
Citations: Rev. Proc. 72-10; 1972-1 C.B. 721

Superseded by Rev. Proc. 77-10 Modified by Rev. Proc. 77-8 Modified by Rev. Proc. 77-3 Modified by Rev. Proc. 77-2 Modified by Rev. Proc. 76-37 Modified by Rev. Proc. 76-27 Modified by Rev. Proc. 76-18 Modified by Rev. Proc. 76-17 Modified by Rev. Proc. 74-50 Modified by Rev. Proc. 74-37 Modified by Rev. Proc. 74-32 Modified by Rev. Proc. 74-31 Modified by Rev. Proc. 74-30 Modified by Rev. Proc. 74-29 Modified by Rev. Proc. 74-28 Modified by Rev. Proc. 74-27 Modified by Rev. Proc. 73-30 Modified by Rev. Proc. 73-28 Modified by Rev. Proc. 73-27 Clarified and Modified by Rev. Proc. 73-26 Modified by Rev. Proc. 73-25 Modified by Rev. Proc. 73-24 Clarified and Modified by Rev. Proc. 73-23 Supplemented by Rev. Proc. 73-3 Supplemented and Modified by Rev. Proc. 73-2

Rev. Proc. 72-10

Section 1. Purpose.

The purpose of this Revenue Procedure is to restate under the rules authorized by section 167(m) of the Code, the asset guideline classes, asset depreciation periods and asset depreciation ranges referred to in section 1.167(a)-11(b)(4) of the Income Tax Regulations for the Class Life Asset Depreciation Range System (ADR) that taxpayers may elect for certain assets first placed in service by the taxpayer after December 31, 1970. In addition, this Revenue Procedure restates under the rules authorized by section 263(f) of the Code the asset guideline class repair allowance percentages referred to in section 1.167(a)-11(d)(2) of the regulations that may be used by electing taxpayers in determining, under sections 162, 212, and 263 of the Internal Revenue Code of 1954, the treatment of expenditures paid or incurred in connection with the repair, maintenance, rehabilitation or improvement of certain property described in section 1.167(a)-11(d)(2)(iii) of the regulations. Taxpayers may elect, in accordance with the provisions of section 1.167(a)-11 of the regulations to apply the established asset depreciation periods and asset depreciation ranges to "eligible property" as defined in section 1.167(a)-11(b)(2) of the regulations, and to apply the established asset guideline class repair allowance percentages to "repair allowance property" as defined in section 1.167(a)-11(d)(2)(iii) of the regulations. Taxpayers may also elect to apply the asset guideline periods in accordance with section 1.167(a)-12 of the regulations to certain property placed in service before January 1, 1971.

Sec. 2. Rules of Application.

2.01 In the case of a building or other structure which is section 1250 property (as defined in section 1250(c) of the Code), in accordance with section 1.167(a)-11(d)(2)(iii) of the regulations each item of such property shall for purposes of applying the asset guideline repair allowance be treated as in a separate asset guideline class. Thus, for example, if the taxpayer has two buildings which would, but for the preceding sentence, be in the same asset guideline class, the repair allowance for each building will be determined by applying section 1.167(a)-11(d)(2)(iii) separately to the unadjusted basis of each building.

2.02 Property which is used predominantly outside the United States may be eligible property if the requirements of section 1.167(a)-11(b)(2) of the regulations are met. In the case of property first placed in service and used predominantly outside the United States during the taxable year of election, an asset guideline period, but no asset depreciation range is in effect. Accordingly, such property shall not be treated as included in the same asset guideline class as property used predominantly inside the United States, for purposes of determining the asset depreciation period under section 1.167(a)-11(b)(4) of the regulations. Thus, for this purpose each asset guideline class described in this Revenue Procedure has an exact counterpart which consists of property otherwise includable within the class, but used predominantly outside the United States during the taxable year of election. Generally, for this purpose property is used predominantly outside the United States if such property is physically located outside the United States during more than 50 percent of days of the taxable year of election, beginning with the date the property is first placed in service. However, there are ten exceptions to this general rule and these are contained in section 48(a)(2) of the Internal Revenue Code of 1954. The asset depreciation period for property, which is determined in the taxable year of election, will not be changed because of a change in predominant use after the close of such taxable year. Although treated as in a separate class for purposes of determining the asset depreciation period, property predominantly used outside the United States shall be included in the same asset guideline class as property predominantly used inside the United States for purposes of applying the asset guideline class repair allowance under section 1.167(a)-11(d)(2) of the regulations.

Sec. 3. Asset Guideline Classes and Periods, Asset Depreciation Ranges, and Annual Asset Guideline Repair Allowance Percentages.

The asset guideline classes, asset guideline periods, asset depreciation ranges, and asset guideline repair allowance percentages have been established as set forth below.

 --------------------------------------------------------------------

 

                                                           Annual

 

                               Asset depreciation range    asset

 

 Asset                                 (in years)          guide-

 

 guide-                        ------------------------    line

 

 line     Description of                Asset              repair

 

 class    assets included       Lower   guide-   Upper     allow-

 

                                limit   line     limit     ance

 

                                        period             per-

 

                                                           centage

 

 --------------------------------------------------------------------

 

 

 00.0  DEPRECIABLE ASSETS USED

 

        IN ALL BUSINESS ACTI-

 

        VITIES, EXCEPT AS

 

        NOTED:

 

 

 00.1   Office Furniture, Fix-

 

         tures, Machines, and

 

         Equipment:

 

 

          Includes furniture

 

           and fixtures which

 

           are not a structu-

 

           ral component of

 

           the building, and

 

           machines and

 

           equipment used in

 

           the preparation of

 

           papers or data.

 

           Includes such as-

 

           sets as desks,

 

           files, safes,

 

           typewriters, ac-

 

           counting, calcu-

 

           lating and data

 

           processing ma-

 

           chines, communi-

 

           cations, dupli-

 

           cating and cop-

 

           ying equipment.......  8         10     12        7.5

 

 

 00.2   Transportation Equip-

 

         ment:

 

 

 00.21    Aircraft (airframes

 

           and engines) except

 

           aircraft of air

 

           transportation com-

 

           panies...............  5          6     7        14.0

 

 

 00.22    Automobiles, taxis....  2.5        3     3.5      16.5

 

 

 00.23    Buses.................  7          9    11.0      11.5

 

 

 00.24    General purpose

 

           trucks, including

 

           concrete ready-mix

 

           trucks and ore

 

           trucks for use

 

           over-the-road:

 

 

 00.241     Light (actual un-

 

             loaded weight

 

             less than 13,000

 

             pounds)............  3          4     5        16.5

 

 

 00.242     Heavy (actual un-

 

             loaded weight

 

             13,000 pounds or

 

             more)..............  5          6     7        10.0

 

 

 00.25    Railroad cars and

 

           locomotives, except

 

           those owned by

 

           railroad transpor-

 

           tation companies..... 12         15    18         8.0

 

 

 00.26    Tractor units used

 

           over-the-road........  3          4     5        16.5

 

 

 00.27    Trailers and trailer-

 

           mounted containers...  5          6     7        10.0

 

 

 00.28    Vessels, barges,

 

           tugs and similar

 

           water transporta-

 

           tion equipment,

 

           except those used

 

           in marine contract

 

           construction......... 14.5       18    21.5       6.0

 

 

 00.3   Land Improvements:/1/

 

 

          Improvements directly

 

           to or added to land

 

           that are more often

 

           than not directly

 

           related to one or

 

 

           another of the spe-

 

           cific classes of

 

           economic activity

 

           specified below.

 

           Includes only those

 

           depreciable land im-

 

           provements which

 

           have a limited pe-

 

           riod of use in the

 

           trade or business,

 

           the length of which

 

           can be reasonably

 

           estimated for the

 

           particular improve-

 

           ment. That is, ge-

 

           neral grading of

 

           land such as in the

 

           case of cemeteries,

 

           golf courses and ge-

 

           neral site grading

 

           and leveling costs

 

           not directly related

 

           to buildings or

 

           other structural

 

           improvements to be

 

           added, are not de-

 

           preciable or inclu-

 

           ded in this class

 

           but such costs are

 

           added to the cost

 

           basis of the land.

 

 

          Includes paved sur-

 

           faces such as side-

 

           walks and roads,

 

           canals, waterways,

 

           drainage facilities

 

           and sewers; wharves

 

           and docks; bridges;

 

           all fences except

 

           those included in

 

           specific classes

 

           described below

 

           (i.e., farm and

 

           railroad fences);

 

           landscaping, shrub-

 

           bery and similar

 

           improvements; radio

 

           and television

 

           transmitting towers,

 

           and other inherently

 

           permanent physical

 

           structures added to

 

           land except buil-

 

           dings and their

 

           structural compo-

 

           nents.

 

 

          Excludes land improve-

 

           ments of electric,

 

           gas, steam and water

 

           utilities; telephone

 

           and telegraph compa-

 

           nies; and pipeline,

 

           water and rail car-

 

           riers which are as-

 

           sets covered by

 

           asset guideline

 

           classes specific to

 

           their respective

 

           classes of economic

 

           activity.............            20

 

 

 01.0  DEPRECIABLE ASSETS USED

 

 to     IN THE FOLLOWING ACTI-

 

 79.0   VITIES:/2/

 

 

 01.0   Agriculture:

 

 

          Includes only such

 

           assets as are identi-

 

           fied below and that

 

           are used in the pro-

 

           duction of crops or

 

           plants, vines and

 

           trees (including fo-

 

           restry); the keeping,

 

           grazing, or feeding

 

           of livestock for ani-

 

           mal products (inclu-

 

           ding serums), for a-

 

           nimals increase, or

 

           value increase; the

 

           operation of dry lot

 

           or farm dairies, nur-

 

           series, greenhouses,

 

           sod farms, mushroom

 

           cellars, cranberry

 

           bogs, apiaries, and

 

           fur farms; the pro-

 

 

           duction of bulb,

 

           flower, and vegetable

 

           seed crops; and the

 

           performance of agri-

 

           cultural, animal hus-

 

           bandry and horticul-

 

           tural services.

 

 

 01.1     Machinery and equipment,

 

           including grain bins

 

           and fences but no other

 

           land improvements....  8         10    12        11.0

 

 

 01.2     Animals:

 

 

 01.21     Cattle, breeding or

 

            dairy...............  5.5        7     8.5

 

 

 01.22     Horses, breeding or

 

            work................  8         10    12

 

 

 01.23     Hogs, breeding.......  2.5        3     3.5

 

 

 01.24     Sheep and goats,

 

            breeding............  4          5     6

 

 

 01.3      Farm buildings....... 20         25    30.0       5.0

 

 

 10.0   Mining:

 

 

          Includes assets used

 

           in the mining and

 

           quarrying of metal-

 

           lic and non-metal-

 

           lic minerals (in-

 

           cluding sand, gra-

 

           vel, stone, and

 

           clay) and the mil-

 

           ling beneficiation

 

           and other primary

 

           preparation of

 

           such materials.......  8         10    12         6.5

 

 

 13.0   Petroleum and natural

 

         gas production and

 

         related activities:

 

 

 13.1     Drilling of oil and

 

           gas wells:

 

 

          Includes assets used

 

           in the drilling of

 

           onshore oil and gas

 

           wells on a con-

 

           tract, fee or other

 

           basis and the pro-

 

           vision of geophy-

 

           sical and other ex-

 

           ploration services;

 

           and the provision

 

           of such oil and gas

 

           field services as

 

           chemical treatment,

 

           plugging and aban-

 

           doning of wells and

 

           cementing or perfo-

 

           rating well casings;

 

           but not including

 

           assets used in the

 

           performance of any

 

           of these activities

 

           and services by in-

 

           tegrated petroleum

 

           and natural gas pro-

 

           ducers for their

 

           own account..........  5          6     7        10.0

 

 

 13.2   Exploration for petro-

 

         leum and natural gas

 

         deposits:

 

 

          Includes assets used

 

           for drilling of

 

           wells and produc-

 

           tion of petroleum

 

           and natural gas,

 

           inclding gathering

 

           pipelines and rela-

 

           ted storage facili-

 

           ties, when these

 

           are related acti-

 

           vities undertaken

 

           by petroleum and

 

           natural gas produ-

 

           cers................. 11         14     17        4.5

 

 

 13.3   Petroleum refining:

 

 

          Includes assets used

 

           for the distilla-

 

 

           tion, fractionation,

 

           and catalytic cra-

 

           cking of crude pe-

 

           troleum into gaso-

 

           line and its other

 

           components........... 13         16    19         7.0

 

 

 13.4   Marketing of petroleum

 

         and petroleum products:

 

 

          Includes assets used

 

           in marketing, such

 

           as related storage

 

           facilities and com-

 

           plete service sta-

 

           tions, but not in-

 

           cluding any of

 

           these facilities

 

           related to petro-

 

           leum and natural

 

           gas trunk pipelines.. 13         16    19         4.0

 

 

 15.0   Contract construction:

 

 

          Includes such assets

 

           used by general buil-

 

           ding, special trade,

 

           heavy construction

 

           and marine contrac-

 

           tors; does not in-

 

           clude assets used by

 

           companies in perfor-

 

           ming construction

 

           services on their

 

           own account.

 

 

 15.1       Contract construc-

 

             tion other than

 

             marine.............  4          5     6        12.5

 

 

 15.2       Marine contract

 

             construction.......  9.5       12    14.5       5.0

 

 

              Includes floa-

 

               ting, self-pro-

 

               pelled and other

 

               drilling plat-

 

               forms used in

 

               offshore dril-

 

               ling for oil

 

               and gas.

 

 

 20.0   Manufacture of foods

 

         and beverages for

 

         human consumption,

 

         and certain related

 

         products, such as

 

         manufactured ice,

 

         chewing gum, vege-

 

         table and animal

 

         fats and oils, and

 

         prepared feeds for

 

         animals and fowls:

 

 

 20.1      Grain and grain

 

            mill products:

 

 

             Includes assets

 

              used in the pro-

 

              duction of

 

              flours, cereals,

 

              livestock feeds,

 

              and other grain

 

              and grain mill

 

              products.......... 13.5       17    20.5       6.0

 

 

 20.2      Sugar and sugar

 

            products:

 

 

             Includes assets

 

              used in the pro-

 

              duction of raw

 

              sugar, syrup or

 

              finished sugar

 

              from sugar cane

 

              or sugar beets.... 14.5       18    21.5       4.5

 

 

 20.3      Vegetable oils and

 

            vegetable oil pro-

 

            ducts:

 

 

             Includes assets

 

              used in the pro-

 

              duction of oil

 

              from vegetable

 

              materials and the

 

              manufacture of re-

 

              lated vegetable

 

              oil products...... 14.5       18    21.5       3.5

 

 

 20.4     All other food and

 

           kindred products:

 

 

            Includes assets

 

             used in the pro-

 

             duction of foods,

 

             beverages and re-

 

             lated production

 

             not included in

 

             classes 20.1,

 

             20.2 and 20.3......  9.5       12    14.5       5.5

 

 

 21.0   Manufacture of tobacco

 

         and tobacco products:

 

 

          Includes assets used

 

           in the production

 

           of cigarettes, ci-

 

           gars, smoking and

 

           chewing tobacco,

 

           snuff and other

 

           tobacco products..... 12         15     18        5.0

 

 

 22.0   Manufacture of textile

 

         mill products:

 

 

 22.1     Knitwear and knit

 

           products:

 

 

            Includes assets used

 

             in the production

 

             of knit apparel

 

             and other finished

 

             articles from yarn.  7          9     11        7.0

 

 

 22.2     Textile mill products:

 

 

            Includes assets used

 

             in the production of

 

             spun, woven or pro-

 

             cessed yarns and

 

             fabrics; of mattres-

 

             ses, carpets, rugs,

 

             pads, and sheets,

 

             and of other pro-

 

             ducts of natural or

 

             synthetic fibers... 11         14    17         4.5

 

 

 22.3     Finishing and dyeing:

 

 

            Includes assets used

 

             in the finishing

 

             and dyeing of natu-

 

             ral and synthetic

 

             fibers, yarns, and

 

             fabric............... 9.5        12    14.5       5.5

 

 

 23.0     Manufacture of apparel

 

           and other finished

 

           products:

 

            Includes assets used

 

             in the production

 

             of clothing and fa-

 

             bricated textile

 

             products by the

 

             cutting and sewing

 

             of woven fabrics,

 

             other textile pro-

 

             ducts and furs; but

 

             does not include

 

             assets used in the

 

             manufacture of appa-

 

             rel from rubber and

 

             leather............  7          9     11        7.0

 

 

 24.0   Manufacture of lumber

 

         and wood products:

 

 

 24.1     Cutting of Timber:

 

 

            Includes logging

 

             machinery and

 

             equipment and

 

             road building

 

             equipment used

 

             by logging and

 

             sawmill opera-

 

             tors and pulp

 

             manufacturers

 

             on their own

 

             account............  5          6     7        10.0

 

 

 24.2     Sawing of dimensio-

 

           nal stock from

 

           logs:

 

 

            Includes machinery

 

             and equipment

 

             installed in per-

 

             manent or well-es-

 

 

             tablished sawmills   8        10    12         6.5

 

 

 24.3     Sawing of dimensional

 

           stock from logs:

 

 

            Includes machinery

 

             and equipment ins-

 

             talled in sawmills

 

             characterized by

 

             temporary founda-

 

             tions and a lack,

 

             or minimum amount,

 

             of lumber-hand-

 

             ling, drying, and

 

             residue disposal

 

             equipment and fa-

 

             cilities...........  5          6     7        10.0

 

 

 24.4     Manufacture of lumber,

 

           wood products, and

 

           furniture:

 

 

            Includes assets used

 

             in the production

 

             of plywood, hard-

 

             board, flooring,

 

             veneers, furniture

 

             and other wood

 

             products, inclu-

 

             ding the treatment

 

             of poles and timber. 8         10    12         6.5

 

 

 26.0   Manufacture of paper and

 

         allied products:

 

 

 26.1     Manufacture of pulps

 

           from wood and other

 

           cellulose fibers and

 

           rags:

 

 

          Includes assets used

 

           in the manufacture

 

           of paper and paper-

 

           board, but does not

 

           include the assets

 

           used in pulpwood

 

           logging nor the ma-

 

           nufacture of hard-

 

           board................ 13         16    19         4.5

 

 

 26.2     Manufacture of paper

 

           and paperboard:

 

 

            Includes assets

 

             used in the pro-

 

             duction of con-

 

             verted products

 

             such as paper

 

             coated off the

 

             paper machines,

 

             paper bags, paper

 

             boxes, and enve-

 

             lopes..............  9.5       12    14.5       5.5

 

 

 27.0   Printing publishing and

 

         allied industries:

 

 

          Includes assets used

 

           in printing by one

 

           or more of the com-

 

           mon processes, such

 

           as letterpress,

 

           lithography, gra-

 

           vure, or screen;

 

           the performance of

 

           services for the

 

           printing trade,

 

           such as bookbinding,

 

           typesetting, engra-

 

           ving, photoengra-

 

           ving, and electro-

 

           typing; and the

 

           publication of

 

           newspapers, books,

 

           and periodicals,

 

           whether or not car-

 

           ried out in con-

 

           junction with prin-

 

           ting.................  9         11     13       5.5

 

 

 28.0   Manufacture of chemicals

 

         and allied products:

 

 

          Includes assets used

 

           in the manufacture of

 

           basic chemicals such

 

           as acids, alkalies,

 

           salts, and organic

 

           and inorganic chemi-

 

           cals; chemical pro-

 

 

           ducts to be used in

 

           further manufacture,

 

           such as synthetic

 

           fibers and plastics

 

           materials, including

 

           petro-chemical pro-

 

           cessing beyond that

 

           which is ordinarily

 

           a part of petroleum

 

           refining; and fi-

 

           nished chemical

 

           products, such as

 

           pharmaceuticals,

 

           cosmetics, soaps,

 

           fertilizers, paints

 

           and varnishes, ex-

 

           plosives, and com-

 

           pressed and liqui-

 

           fied gases. Does

 

           not include assets

 

           used in the manu-

 

           facture of finished

 

           rubber and plastic

 

           products or in the

 

           production of natu-

 

           ral gas products,

 

           butane, propane, and

 

           byproducts of natu-

 

           ral gas production

 

           plants...............  9         11    13         5.5

 

 

 30.0   Manufacture of rubber

 

         and plastic products:

 

 

 30.1     Manufacture of rubber

 

           products:

 

 

            Includes assets

 

             used for the

 

             production of

 

             products from

 

             natural, synthe-

 

             tic, or reclaimed

 

             rubber, gutta per-

 

             cha, balata, or

 

             gutta siak, such

 

             as tires, tubes,

 

             rubber footwear,

 

             mechanical rubber

 

             goods, heels and

 

             soles, flooring,

 

             and rubber sun-

 

             dries; and in the

 

             recapping, retrea-

 

             ding, and rebuil-

 

             ding of tires...... 11         14    17        5.0

 

 

 30.2     Manufacture of mis-

 

           cellaneous finished

 

           plastics products:

 

 

            Includes assets

 

             used in the manu-

 

             facture of plas-

 

             tics products and

 

             the molding of pri-

 

             mary plastics for

 

             the trade. Does

 

             not include assets

 

             used in the manufac-

 

             ture of basic plas-

 

             tics materials nor

 

             the manufacture of

 

             phonograph records.  9         11    13         5.5

 

 

 31.0   Manufacture of leather:

 

 

          Includes assets used

 

           in the tanning, cur-

 

           rying, and finishing

 

           of hides and skins:

 

           the processing of

 

           fur pelts; and the

 

           manufacture of fi-

 

           nished leather pro-

 

           ducts, such as foot-

 

           wear, belting, appa-

 

           rel, luggage and si-

 

           milar leather goods..  9         11    13         5.5

 

 

 32.0   Manufacture of stone,

 

         clay, glass, and con-

 

         crete products:

 

 

 32.1     Manufacture of glass

 

           products:

 

 

            Includes assets

 

             used in the pro-

 

             duction of flat,

 

 

             blown, or pressed

 

             products of glass,

 

             such as plate

 

             safety and window

 

             glass, glass con-

 

             tainers, glassware

 

             and fiberglass.

 

             Does not include

 

             assets used in the

 

             manufacture of

 

             lenses............. 11         14    17         6.0

 

 

 32.0   Manufacture of stone,

 

         clay, glass, and

 

         concrete products,

 

         continued:

 

 

 32.2     Manufacture of cement:

 

 

            Includes assets used

 

             in the production

 

             of cement, but does

 

             not include any as-

 

             sets used in the

 

             manufacture of

 

             concrete and con-

 

             crete products nor

 

             in any mining or

 

             extraction process. 16         20    24         3.0

 

 

 32.3     Manufacture of other

 

           stone and clay pro-

 

           ducts:

 

 

            Includes assets

 

             used in the manu-

 

             facture of pro-

 

             ducts from mate-

 

             rials in the form

 

             of clay and stone,

 

             such as brick,

 

             tile and pipe;

 

             pottery and rela-

 

             ted products, such

 

             as vitreous-china,

 

             plumbing fixtures,

 

             earthenware and ce-

 

             ramic insulating

 

             materials; and also

 

             includes assets

 

             used in manufac-

 

             ture of concrete

 

             and concrete pro-

 

             ducts. Does not

 

             include assets

 

             used in any mining

 

             or extraction pro-

 

             cesses............. 12         15    18         4.5

 

 

 33.0   Manufacture of primary

 

         metals:

 

 

          Includes assets used

 

           in the smelting and

 

           refining of ferrous

 

           and nonferrous me-

 

           tals from ore, pig,

 

           or scrap, the rol-

 

           ling, drawing, and

 

           alloying of ferrous

 

           and nonferrous me-

 

           tals; the manufac-

 

           ture of castings,

 

           forgings, and other

 

           basic products of

 

           ferrous and nonfer-

 

           rous metals; and

 

           the manufacture of

 

           nails, spikes,

 

           structural shapes,

 

           tubing, and wire

 

           and cable.

 

 

 33.1     Ferrous metals........ 14.5       18    21.5       8.0

 

 

 33.2     Nonferrous metals..... 11         14    17         4.5

 

 

 34.0   Manufacture of fabri-

 

         cated metal products:

 

 

          Includes assets used

 

           in the production

 

           of metal cans, tin-

 

           ware, nonelectric

 

           heating apparatus,

 

           fabricated struc-

 

           tural metal pro-

 

           ducts, metal stam-

 

           pings and other

 

           ferrous and nonfer-

 

 

           rous metal and wire

 

           products not else-

 

           where classified.....  9.5       12    14.5       6.0

 

 

 35.0   Manufacture of machi-

 

         nery, except electri-

 

         cal and transportation

 

         equipment:

 

 

 35.1     Manufacture of metal-

 

           working machinery:

 

 

            Includes assets

 

             used in the pro-

 

             duction of metal

 

             cutting and for-

 

             ming machines,

 

             special dies,

 

             tools, jigs, and

 

             fixtures, and ma-

 

             chine tool acces-

 

             sories.............  9.5       12    14.5       5.5

 

 

 35.2     Manufacture of other

 

           machines:

 

 

            Includes assets

 

             used in the pro-

 

             duction of such

 

             machinery as

 

             engines and tur-

 

             bines; farm ma-

 

             chinery, construc-

 

             tion, and mining

 

             machinery; general

 

             and special indus-

 

             trial machines in-

 

             cluding office ma-

 

             chines and non-e-

 

             lectronic compu-

 

             ting equipment;

 

             miscellaneous ma-

 

             chines except e-

 

             lectrical equip-

 

             ment and transpor-

 

             tation equipment...  9.5       12    14.5       5.5

 

 

 36.0   Manufacture of electri-

 

         cal machinery, equip-

 

         ment, and supplies:

 

 

          Includes assets used

 

           in the production of

 

           machinery, apparatus,

 

           and supplies for the

 

           generation, storage,

 

           transmission, trans-

 

           formation, and uti-

 

           lization of elec-

 

           trical energy.

 

 

 36.1     Manufacture of electrical

 

           equipment:

 

 

            Includes assets

 

             used in the pro-

 

             duction of such

 

             machinery as elec-

 

             tric test and dis-

 

             tributing equip-

 

             ment, electrical

 

             industrial appa-

 

             ratus, household

 

             appliances, elec-

 

             tric lighting and

 

             wiring equipment;

 

             electronic compo-

 

             nents and accesso-

 

             ries, phonograph

 

             records, storage

 

             batteries and ig-

 

             nition systems....   9.5       12    14.5       5.5

 

 

 36.2     Manufacture of elec-

 

           tronic products:

 

 

            Includes assets

 

             used in the pro-

 

             duction of elec-

 

             tronic detection,

 

             guidance, control,

 

             radiation, compu-

 

             tation, test and

 

             navigation equip-

 

             ment and the com-

 

             ponents thereof.

 

             Does not include

 

             the assets of ma-

 

             nufacturers engaged

 

             only in the pur-

 

 

             chase and assembly

 

             of components......  6.5        8     9.5       7.5

 

 

 37.0   Manufacture of trans-

 

         portation equipment:

 

 

          Includes assets used

 

           in the production of

 

           such machinery as

 

           vehicles and equip-

 

           ment for the trans-

 

           portation of pas-

 

           sengers and cargo.

 

 

 37.1     Manufacture of motor

 

           vehicles and parts:

 

 

            Includes assets

 

             used in the pro-

 

             duction of auto-

 

             mobiles, trucks,

 

             trailers, buses

 

             and their compo-

 

             nent parts.........  9.5       12    14.5       5.5

 

 

 37.2     Manufacture of aero-

 

           space products:

 

 

            Includes assets

 

             used in the pro-

 

             duction of air-

 

             craft, spacecraft,

 

             rockets, missiles

 

             and their compo-

 

             nent parts.........  6.5        8     9.5       7.5

 

 

 37.3     Ship and boat building:

 

 

            Includes assets used

 

             in the manufacture

 

             and repair of ships

 

             and boats, but ex-

 

             cludes dry docks...  9.5       12    14.5       8.0

 

 

 37.4     Manufacture of rail-

 

           road transportation

 

           equipment:

 

 

            Includes assets

 

             used in the buil-

 

             ding and rebuil-

 

             ding of railroad

 

             locomotives, rail-

 

             road cars, and

 

             street railway

 

             cars...............  9.5       12    14.5       5.5

 

 

 38.0   Manufacture of profes-

 

         sional, scientific,

 

         and controlling ins-

 

         truments; photogra-

 

         phic and optical

 

         goods; watches and

 

         clocks:

 

 

          Includes assets used

 

           in the manufacture

 

           of mechanical mea-

 

           suring, engineering,

 

           laboratory and scien-

 

           tific research ins-

 

           truments, optical

 

           instruments and len-

 

           ses; surgical, me-

 

           dical and dental ins-

 

           truments, equipment

 

           and supplies; oph-

 

           thalmic goods, pho-

 

           tographic equipment

 

           and supplies; and

 

           watches and clocks...  9.5       12    14.5       5.5

 

 

 39.0   Manufacture of products

 

         not elsewhere classi-

 

         fied:

 

 

          Includes assets used

 

           in the production

 

           of jewelry; musical

 

           instruments; toys

 

           and sporting goods;

 

           pens, pencils,

 

           office and art

 

           supplies. Also in-

 

           cludes assets used

 

           in production of

 

           motion picture and

 

           television films

 

           and tapes; as waste

 

           reduction plants;

 

 

           and in the ginning

 

           of cotton............  9.5       12    14.5       5.5

 

 

 40.0   Railroad Transportation:

 

 

          Includes the assets

 

           identified below and

 

           which are used in

 

           the commercial and

 

           contract carrying

 

           of passengers and

 

           freight by rail.

 

           Excludes any non-

 

           depreciable assets

 

           included in Inter-

 

           state Commerce Com-

 

           mission accounts

 

           enumerated for this

 

           class.

 

 

 40.1     Railroad machinery and

 

           equipment............ 11         14    17        10.5

 

 

            Includes assets clas-

 

             sified in the follo-

 

             wing Interstate

 

             Commerce Commission

 

             accounts:

 

 

              Road accounts:

 

 

               (16) Station and

 

                    office buil-

 

                    dings

 

                    (freight

 

                    handling ma-

 

                    chinery and

 

                    equipment

 

                    only)

 

               (26) Communication

 

                    systems

 

               (27) Signals and

 

                    interlockers

 

               (37) Roadway

 

                    machines

 

               (44) Shop ma-

 

                    chinery

 

 

              Equipment

 

               accounts:

 

 

               (52) Locomotives

 

               (53) Freight

 

                    train

 

                    cars

 

               (54) Passenger

 

                    train cars

 

               (55) Highway

 

                    revenue

 

                    equipment

 

               (57) Work

 

                    equipment

 

 

 40.2     Railroad structures

 

           and similar im-

 

           provements........... 24         30    36         5.0

 

 

            Includes assets

 

             classified in the

 

             following Inter-

 

             state Commerce

 

             Commission road

 

             accounts:

 

 

               (6) Bridges,

 

                   trestles,

 

                   and culverts

 

               (7) Elevated

 

                   structure

 

              (13) Fences, snow-

 

                   sheds and

 

                   signs

 

              (16) Station and

 

                   office buil-

 

                   dings (sta-

 

                   tions and

 

                   other opera-

 

                   ting struc-

 

                   tures only)

 

              (17) Roadway

 

                   buildings

 

              (18) Water stations

 

              (19) Fuel stations

 

              (20) Shops and

 

                   enginehouses

 

              (31) Power trans-

 

                   mission sys-

 

                   tems

 

              (35) Miscellaneous

 

                   structures

 

 

              (39) Public im-

 

                   provements

 

                   construction

 

 

 40.3     Railroad wharves

 

           and docks............ 16         20    24         5.5

 

 

            (23) Wharves and

 

                 docks

 

            (24) Coal and ore

 

                 wharves

 

 

 40.5     Railroad power

 

           plant and equip-

 

           ment:

 

 

            Electric generating

 

             equipment:

 

 

 40.51        Hydraulic......... 40         50    60         1.5

 

 

 40.52        Nuclear........... 16         20    24         3.0

 

 

 40.53        Steam............. 22.5       28    33.5       2.5

 

 

 40.54        Steam, compressed

 

               air, and other

 

               power plant

 

               equipment........ 22.5       28    33.5       7.5

 

 

 41.0   Motor transport-passen-

 

         gers:

 

 

          Includes assets used

 

           in the urban and

 

           interurban commer-

 

           cial and contract

 

           carrying of passen-

 

           gers by road, except

 

           the transportation

 

           assets included in

 

           class 00.2 above.....  6.5        8     9.5      11.5

 

 

 42.0   Motor transport-freight:

 

 

          Includes assets used

 

           in the commercial

 

           and contract carrying

 

           of freight by road,

 

           except the transpor-

 

           tation assets inclu-

 

           ded in class 00.2

 

           above................  6.5        8     9.5      11.0

 

 

 44.0   Water transportation:

 

 

          Includes assets used

 

           in the commercial

 

           and contract carrying

 

           of freight and passen-

 

           gers by water except

 

           the transportation

 

           assets included in

 

           class 00.2 above..... 16         20    24         8.0

 

 

 45.0   Air transport:

 

 

          Includes assets used

 

           in the commercial

 

           and contract carrying

 

           of passengers and

 

           freight by air.......  5          6     7        14.0

 

 

 46.0   Pipeline transportation:

 

 

          Includes assets used

 

           in the private, com-

 

           mercial, and contract

 

           carrying of petroleum,

 

           gas, and other pro-

 

           ducts by means of

 

           pipes conveyors. The

 

           trunk lines related

 

           storage facilities

 

           of integrated petro-

 

           leum and natural

 

           gasproducers are in-

 

           cluded in this class. 17.5       22    26.5       3.0

 

 

 48.0   Communication:

 

 

          Includes assets used

 

           in the furnishing

 

           of point-to-point

 

           communication ser-

 

           vices by wire or

 

           radio, whether in-

 

           tended to be received

 

           aurally or visually;

 

           and radio broadcas-

 

 

           ting and television.

 

 

 48.1     Telephone:

 

 

            Includes the assets

 

             identified below

 

             and which are used

 

             in the provision

 

             of commercial and

 

             contract telephonic

 

             services:

 

 

 48.11        Central office

 

               buildings:

 

 

                Special purpose

 

                 structures in-

 

                 tended to house

 

                 central office

 

                 equipment and

 

                 which are clas-

 

                 sified in Fede-

 

                 ral Communica-

 

                 tions Commis-

 

                 sion Account

 

                 No. 212........ 36         45    54         1.5

 

 

 48.12        Central office

 

               equipment:

 

 

                Includes central

 

                 office swit-

 

                 ching and rela-

 

                 ted equipment

 

                 classified in

 

                 Federal Commu-

 

                 nications Com-

 

                 mission Account

 

                 No. 221........ 16         20    24         6.0

 

 

 48.13        Station equipment:

 

 

                Includes such

 

                 station appa-

 

                 ratus and con-

 

                 nections as

 

                 teletypewri-

 

                 ters, tele-

 

                 phones, booths,

 

                 and private

 

                 exchanges as

 

                 are classified

 

                 in Federal Com-

 

                 munications

 

                 Commission Ac-

 

                 count Nos.

 

                 231, 232, and

 

                 234............  8        10     12        10.0

 

 

 48.14        Distribution plant:

 

 

                Includes such

 

                 assets as pole

 

                 lines, cable,

 

                 aerial wire and

 

                 underground

 

                 conduits as are

 

                 classified in

 

                 Federal Commu-

 

                 nications Com-

 

                 mission Account

 

                 Nos. 241,

 

                 242.1, 242.2,

 

                 242.3, 242.4,

 

                 243, and 244... 28         35    42         2.0

 

 

 48.2     Radio and television

 

           broadcasting.........  5          6     7        10.0

 

 

 49.0  Electric, gas and sani-

 

        tary services:

 

 

 49.1   Electric Utilities:

 

 

          Includes assets used

 

           in the production,

 

           transmission and

 

           distribution of

 

           electricity for

 

           sale, including

 

           related land im-

 

           provements and

 

           identified as:

 

 

 49.11          Hydraulic pro-

 

                 duction plant:

 

 

                Including dams,

 

                 flumes, canals

 

                 and waterways.

 

 

                  Also includes

 

                   jet engines

 

                   and other

 

                   internal

 

                   combustion

 

                   engines used

 

                   to operate

 

                   auxiliary

 

                   facilities

 

                   for load

 

                   shaving pur-

 

                   poses or in

 

                   case of

 

                   emergencies.. 40         50    60         1.5

 

 

 49.12          Nuclear produc-

 

                 tion plant:

 

 

                  Includes jet

 

                   engines and

 

                   other inter-

 

                   nal combus-

 

                   tion engines

 

                   used to ope-

 

                   rate auxi-

 

                   liary facili-

 

                   ties for load

 

                   shaving pur-

 

                   poses or in

 

                   case of emer-

 

                   gencies...... 16         20    24         3.0

 

 

 49.13          Steam production

 

                 plant:

 

 

                  Includes jet

 

                   engines and

 

                   other inter-

 

                   nal combus-

 

                   tion engines

 

                   used to ope-

 

                   rate auxi-

 

                   liary faci-

 

                   lities for

 

                   load shaving

 

                   purposes or

 

                   in case of

 

                   emergencies.. 22.5       28    33.5       2.5

 

 

 49.14          Transmission

 

                 and distri-

 

                 bution faci-

 

                 lities......... 24         30    36         2.0

 

 

 49.2     Gas Utilities:

 

 

            Includes assets

 

             used in the produc-

 

             tion, transmission,

 

             and distribution

 

             of natural and ma-

 

             nufactured gas for

 

             sale, including

 

             related land im-

 

             provements and

 

             identified as:

 

 

 49.21        Distribution fa-

 

               cilities:

 

 

                Including gas

 

                 water heaters

 

                 and gas conver-

 

                 sion equipment

 

                 installed by

 

                 utility on cus-

 

                 tomers' premi-

 

                 ses on a rental

 

                 basis.......... 28         35    42         2.0

 

 

 49.22          Manufactured

 

                 gas production

 

                 plant.......... 24         30    36         2.0

 

 

 49.23          Natural gas

 

                 production

 

                 plant.......... 11         14    17         4.5

 

 

 49.24          Trunk pipelines

 

                 and related

 

                 storage faci-

 

                 lities......... 17.5       22    26.5       3.0

 

 49.3     Water utilities:

 

 

            Includes assets

 

             used in the

 

             gathering,

 

             treatment, and

 

             commercial dis-

 

 

             tribution of

 

             water.............. 40         50    60         1.5

 

 

 49.4     Central steam produc-

 

           tion and distribu-

 

           tion:

 

 

            Includes assets used

 

             in the production

 

             and distribution of

 

             steam for sale..... 22.5       28    33.5       2.5

 

 

 50.0   Wholesale and retail

 

         trade:

 

 

          Includes assets used

 

           in carrying out the

 

           activities of pur-

 

           chasing, assembling,

 

           storing, sorting,

 

           grading, and selling

 

           of goods at both the

 

           wholesale and retail

 

           level. Also includes

 

           assets used in such

 

           activities as the

 

           operation of restau-

 

           rants, cafes, coin-

 

           operated dispensing

 

           machines, and in

 

           brokerage of scrap

 

           metal................  8         10    12         6.5

 

 

 65.0   Building Services:/3/

 

 

          Provision of the ser-

 

           vices of buildings,

 

           whether for use by

 

           others or for tax-

 

           payer's own account.

 

           Assets in the clas-

 

           ses listed below

 

           include the struc-

 

           tural shells of buil-

 

           dings and all integ-

 

           ral parts thereof;

 

           equipment that ser-

 

           vices normal heating,

 

           plumbing, air condi-

 

           tioning, illumina-

 

           tion, fire preven-

 

           tion, and power re-

 

           quirements; equip-

 

           ment for the movement

 

           of passengers and

 

           freight within the

 

           building; and any

 

           additions to buil-

 

           dings or their com-

 

           ponents, capitalized

 

           remodeling costs,

 

           and partitions both

 

           permanent and semi-

 

           permanent. Struc-

 

           tures, closely rela-

 

           ted to the equipment

 

           they house, which are

 

           section 38 property

 

           are not included.

 

           See section 1.48-1

 

           (e)(1) of the regu-

 

           lations. Such struc-

 

           tures are included

 

           in asset guideline

 

           classes appropriate

 

           to the equipment to

 

           which they are rela-

 

           ted. Depreciation

 

           periods for assets

 

           used in the provision

 

           of the services of

 

           buildings and which

 

           are not specified

 

           below shall be deter-

 

           mined according to

 

           the facts and cir-

 

           cumstances pertinent

 

           to each asset,

 

           except in the case

 

           of farm buildings

 

           and other building

 

           structures for which

 

           a specific class has

 

           otherwise been desig-

 

           nated.

 

 

 65.1     Shelter, space, and

 

           related building

 

           services for manu-

 

           facturing and for

 

 

           machinery and equip-

 

           ment repair activi-

 

           ties:

 

 

 65.11      Factories...........            45

 

 

 65.12      Garages.............            45

 

 

 65.13      Machine shops.......            45

 

 

 65.14      Loft buildings......            50

 

 

 65.2     Building services

 

           for the conduct of

 

           wholesale and re-

 

           tail trade, in-

 

           cludes stores and

 

           similar structures...            50

 

 

 65.3     Building services

 

           for residential

 

           purposes:

 

 

 65.31      Apartments..........            40

 

 

 65.32      Dwellings...........            45

 

 

 65.4     Building services re-

 

           lating to the provi-

 

           sion of miscella-

 

           neous services to

 

           businesses and con-

 

           sumers:

 

 

 65.41      Office buildings....            45

 

 

 65.42    Storage:

 

 

 65.421     Warehouses..........            60

 

 

 65.422     Grain elevators.....            60

 

 

 65.43    Banks.................            50

 

 

 65.44    Hotels................            40

 

 

 65.45    Theaters..............            40

 

 

 70.0   Services:

 

 

          Includes assets used

 

           in the provision of

 

           personal services

 

           such as those offered

 

           by hotels and motels,

 

           laundry and dry clea-

 

           ning establishments,

 

           beauty and barber

 

           shops, photographic

 

           studios and mortua-

 

 

           ries. Includes assets

 

           used in the provision

 

           of professional ser-

 

           vices such as those

 

           offered by doctors,

 

           dentists, lawyers,

 

           accountants, archi-

 

           tects, engineers,

 

           and veterinarians.

 

           Includes assets used

 

           in the provision of

 

           repair and mainte-

 

           nance services and

 

           those assets used

 

           in providing fire

 

           and burglary pro-

 

           tection services.

 

 

          Includes equipment or

 

           facilities used by

 

           cemetery organiza-

 

           tions, news agen-

 

           cies, teletype wire

 

           services, plumbing

 

           contractors, frozen

 

           food lockers, re-

 

           search laboratories,

 

           hotels, and motels

 

           (except office fur-

 

           niture and fixtures).  8         10    12         6.5

 

 

 79.0   Recreation and Amuse-

 

         ment:

 

 

          Includes assets used

 

           in the provision of

 

           amusement or enter-

 

           tainment services on

 

           payment of a fee or

 

           admission charge, as

 

           in the operation of

 

           bowling alleys, bil-

 

           liard and pool esta-

 

           blishments, theaters,

 

           concert halls, amuse-

 

           ment parks, and mi-

 

           niature golf courses.

 

           Does not include such

 

           assets which consist

 

           primarily of specia-

 

           lized land improve-

 

           ments or structures,

 

           such as golf courses,

 

           sports stadia, race

 

           tracks, ski slopes,

 

           or buildings which

 

           house bowling alleys.  8         10    12         6.5

 

 

 --------------------------------------------------------------------

 

 

1 This class is established for a three-year transition period in accordance with Section 109(e)(1) of the Revenue Act of 1971 (P.L. 92-178, page 443, this Bulletin) and will be in effect for the period beginning January 1, 1971 and ending January 1, 1974 or at such earlier date as of which asset classes incorporating the assets herein described are represcribed or modified.

2 All assets classes defined below include subsidiary assets within the meaning of Section 109(e)(2) of the Revenue Act of 1971 whenever such assets are used in the economic activities specified. However, in accordance with the provisions of that section of the Act, during the period beginning on January 1, 1971 and ending January 1, 1974 or such earlier date as of which asset classes incorporating the subsidiary assets are represcribed or modified, taxpayers may exclude from an election all subsidiary assets in a specified class provided that at least 3 percent of all the assets placed in service in the class during the taxable year are subsidiary assets. See section 1.167(a)-11(b)(5)(vii) for application of 3 percent test.

3 This class is established for a three-year transition period in accordance with Section 109(e)(1) of the Revenue Act of 1971 (P.L. 92-178, page 443 (and will be in effect for the period beginning January 1, 1971 and ending January 1, 1974 or at such earlier date as of which asset classes incorporating the assets herein described are represcribed or modified. See Sections 1.167(a)-11(b)(3)(ii), 1.167(a)-11(b)(4)(a), and 1.167(a)-11(b)(5)(vi) of the regulations for special rules relating to real property.

Sec. 4. Effect on Other Documents.

.01 The provisions of Revenue Procedure 62-21, C.B. 1962-2, 418, including subsequent supplements and amendments thereto, are revoked for taxable years ending after December 31, 1970, except to the extent continued in effect for limited purposes under sections 1.167(a)-11(b)(5)(vi) and 1.167(a)-12. See section 1.167(a)-12 of the regulations with respect to the provisions of an elective guideline system for determining the reasonable allowance for depreciation for taxable years ending after December 31, 1970, for certain assets placed in service before January 1, 1971.

.02 Revenue Procedure 71-25, C.B. 1971-2, 553 is superseded, since the provisions stated therein are updated, and revised, and restated under the current statute and regulations.

.03 The asset guideline classes, asset guideline periods, asset depreciation ranges and asset guideline class repair allowances set forth in this Revenue Procedure will from time to time be supplemented and revised Taxpayers using this Revenue Procedure should apply it as supplemented and revised.

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    (Also Part I, Section 167.)

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