Rev. Proc. 74-31
Rev. Proc. 74-31; 1974-2 C.B. 487
- Cross-Reference
26 CFR 601.105: Examination of returns and claims for refund, credit
or abatement; determination of correct tax liability.
(Also Part I, Section 167; 1.167(a)-11.)
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
Superseded by Rev. Proc. 77-10
Section 1. Purpose.
The purpose of this Revenue Procedure is to prescribe under section 1.167(a)-11 of the Income Tax Regulations supplementary asset guideline classes and asset depreciation periods and ranges for service assets (subsidiary assets) used in all qualified activities in class 50.0 Wholesale and retail trade and class 70.2 Personal and professional services. The term subsidiary assets is defined under section 1.167(a)-11(b)(5)(vii) of the regulations.
This Revenue Procedure also provides a more specific definition of subsidiary assets, here renamed "service assets," used principally in restaurant and hotel/motel enterprises included in activity classes 50.0 and 70.2 and to provide for their proper classification under the Class Life Asset Depreciation Range System.
The determination of whether service assets are subject to an allowance for depreciation or expense shall be based upon the particular facts and circumstances. Service assets subject to an allowance for depreciation under section 167 of the Internal Revenue Code of 1954, are eligible property under the Class Life ADR System. Service assets may be depreciated under a method not described by section 167(b)(1), (2), or (3), if the requirements of section 1.167(a)-11(b)(5)(v) of the regulations are met. In addition, service assets properly expensed under section 162 are not eligible property under the CLADR system. Service assets may be treated as mass assets as defined under section 1.47-1(e)(4).
Sec. 2. Asset Guideline Classes and Periods and Asset Depreciation Ranges for Service Assets.
The asset guideline class, period and range for class 50.1 Wholesale and retail trade service assets and class 70.21 Personal and Professional services service assets are prescribed below.
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Annual
Asset Depreciation Asset
Asset Range (in years) Guideline
Guide- ____________________________ Repair
line Description of Lower Asset Guide- Upper Allowance
Class Assets Included Limit line Period Limit Percentage
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50.1 Wholesale and retail
trade service assets:
Includes assets such
as glassware, silver-
ware, (including kit-
chen utensils), croc-
kery (usually china)
and linens (generally
napkins, tablecloths
and towels) used in
qualified activities
as defined in class
50.0 _________________ 2 2.5 3 -
70.21 Personal and profes-
sional services ser-
vice assets:
Includes assets
such as glassware, sil-
verware, crockery, and
linens (generally
sheets, pillowcases and
bath towels) used in
qualified activities as
defined in class
70.2 _________________ 2 2.5 3 -
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Sec. 3. Effect on Other Documents.
Rev. Proc. 72-10, 1972-1 C.B. 721, is modified by the addition of class 50.1, Wholesale and retail trade service assets, and class 70.21, Personal and professional services service assets, with newly established guideline periods and ranges.
Sec. 4. Effective Date.
The asset guideline periods and ranges for class 50.1 Wholesale and retail trade service assets and class 70.21 Personal and professional services service assets are effective for property placed in service after December 31, 1973.
1 Also released as Technical Information Release 1304, dated August 23, 1974.
- Cross-Reference
26 CFR 601.105: Examination of returns and claims for refund, credit
or abatement; determination of correct tax liability.
(Also Part I, Section 167; 1.167(a)-11.)
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
