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Rev. Proc. 77-2

Rev. Proc. 77-2; 1977-1 C.B. 534

DATED
DOCUMENT ATTRIBUTES
  • Cross-Reference

    26 CFR 601.105: Examination of returns and claims for refund, credit

    or abatement; determination of correct tax liability.

    (Also Part 1, Section 167; 1.167(a)-11.)

  • Code Sections
  • Language
    English
  • Tax Analysts Electronic Citation
    not available
Citations: Rev. Proc. 77-2; 1977-1 C.B. 534

Superseded by Rev. Proc. 77-10

Rev. Proc. 77-2 1

Section 1. Purpose.

The purpose of this Revenue Procedure is to prescribe under section 1.167(a)-11 of the Income Tax Regulations, revised asset guideline classes for assets used to manufacture pulp and paper and converted paper, paperboard, and pulp products, and to prescribe asset guideline depreciation periods and ranges, and annual asset guideline repair allowance percentages for these classes.

The description of asset guideline class 26.1 has been revised to include pollution control assets and all land improvements associated with the factory site or production process such as effluent ponds and canals, providing such improvements are depreciable. However, it does not include pollution control assets that are included under an election pursuant to section 169(a) of the Internal Revenue Code of 1954.

The revised asset guideline classes, asset guideline depreciation periods and ranges, and annual asset guideline repair allowance percentages are set forth in Section 2 of this Revenue Procedure.

Sec. 2. Asset Guideline Classes, Asset Guideline Depreciation Periods and Ranges, and Annual Asset Guideline Repair Allowance Percentages for Assets Used in the Manufacture of Pulp and Paper and of Converted Paper, Paperboard, and Pulp Products.

The asset guideline classes, asset guideline depreciation periods and ranges, and annual asset guideline repair allowance percentages are prescribed as set forth below.

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

 

                                      Asset Depreciation

 

                                       Range (in years)    Annual

 

                                     --------------------  Asset

 

 Asset                                      Asset          Guideline

 

 Guide-                                     Guide-         Repair

 

 line       Description of           Lower  line    Upper  Allowance

 

 Class      Assets Included          Limit  Period  Limit  Percentage

 

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

 

 26.1     Manufacture of Pulp and

 

          Paper:

 

 

            Includes assets for

 

          pulp materials handling

 

          and storage, pulp mill

 

          processing, bleach

 

          processing, paper and

 

          paper-board manufacturing,

 

          and on-line finishing.

 

          Includes pollution control

 

          assets and all land

 

          improvements associated

 

          with the factory site or

 

          production process such

 

          as effluent ponds and

 

          canals, provided such

 

          improvements are

 

          depreciable but does not

 

          include buildings and

 

          structural components as

 

          defined in section

 

          1.48-1(e)(1) of the

 

          regulations. Includes

 

          steam and chemical

 

          recovery boiler systems,

 

          with any rated capacity,

 

          used for the recovery

 

          and regeneration of

 

          chemicals used in

 

          manufacturing. Does not

 

          include assets used

 

          either in pulp-wood

 

          logging, or in the

 

          manufacture of hardwood __ 10.5    13      15.5     10

 

 

 26.2     Manufacture of Converted

 

          Paper, Paperboard, and

 

          Pulp Products:

 

 

             Includes assets used

 

          for modification, or

 

          remanufacture of paper

 

          and pulp into converted

 

          products, such as paper

 

          coated off the paper

 

          machine, paper bags,

 

          paper boxes, cartons and

 

          envelopes. Does not

 

          include assets used for

 

          manufacture of non-

 

          wovens that are

 

          elsewhere classified _____  8      10      12       15

 

 

Sec. 3. Effect on Other Documents.

Rev. Proc. 72-10, 1972-1, C.B. 721, is modified by the prescription of revised asset guideline classes 26.1 Manufacture of Pulp and Paper, and 26.2 Manufacture of Converted Paper, Paperboard, and Pulp Products, with prescribed asset guideline depreciation periods and ranges, and annual asset guideline repair allowance percentages as set forth in Section 2 of this Revenue Procedure.

Sec. 4. Effective Date.

The asset guideline classes, asset guideline depreciation periods and ranges, and annual asset guideline repair allowance percentages for the activity classes set forth in this Revenue Procedure are effective for property first placed in service after December 31, 1975.

1 Also released as IR-1719, dated December 27, 1976.

DOCUMENT ATTRIBUTES
  • Cross-Reference

    26 CFR 601.105: Examination of returns and claims for refund, credit

    or abatement; determination of correct tax liability.

    (Also Part 1, Section 167; 1.167(a)-11.)

  • Code Sections
  • Language
    English
  • Tax Analysts Electronic Citation
    not available
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