Rev. Proc. 74-30
Rev. Proc. 74-30; 1974-2 C.B. 483
- 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Superseded by Rev.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(b)(4)(i) of the Income Tax Regulations subclasses for special tools (subsidiary assets) in the following manufacturing activity classes.
ASSET GUIDELINE CLASS
AGC Number AGC Title
20.0 Manufacture of food and beverages
30.1 Manufacture of rubber products
30.2 Manufacture of miscellaneous finished plastic products
33.1 Manufacture of primary metals (ferrous)
33.2 Manufacture of primary metals (nonferrous)
34.0 Manufacture of fabricated metal products
35.1 Manufacture of metalworking machinery
35.2 Manufacture of other machines
36.1 Manufacture of electrical equipment
37.3 Ship and boat building
In establishing new asset guideline subclasses for special tools, it is provided that these new subclasses are additions to and part of the appropriate existing manufacturing activity classes to which they relate, and such subclasses are not separately subject to possible exclusion from the election provided for in section 1.167(a)-11(b)(5)(v) of the regulations.
Section 1.167(a)-11(b)(5)(vii) of the regulations provides, in part, that a taxpayer may exclude from an election all subsidiary assets first placed in service during the taxable year of election in an asset guideline class provided that (a) the unadjusted basis of eligible subsidiary assets first placed in service during the taxable year in the class is as much as 3 percent of the unadjusted basis of all eligible property first placed in service during the taxable year in the class and (b) such subsidiary assets are first placed in service by the taxpayer before the earlier of (1) the effective date of the first supplemental asset guideline class including such subsidiary assets or (2) January 1, 1974.
Unless a specific special tool (subsidiary asset) class has been established for an activity as set forth in this Revenue Procedure or other supplement or revision of Rev. Proc. 72-10, special tools (subsidiary assets) placed in service after December 31, 1973, must be included with other machinery and equipment in the general activity asset guideline class.
Repair allowance percentages are prescribed for some of the classes based upon detailed study of data for each of the manufacturing activities involved. In those instances where no repair allowance percentage is provided repairs were found to be ordinarily insignificant or de minimus or as in the case of Rubber Manufacturing--Special Tools, Asset Guideline Class 30.11, it was found that any general rebuilding or rehabilitation costs for special tools were traditionally capitalized as the cost of a new asset.
Sec. 2. Asset Guideline Classes and Periods, Asset Depreciation Ranges, and Annual Asset Guideline Repair Allowance Percentage for Assets Used in the Enumerated Manufacturing Activity Classes.
The asset guideline classes, periods, ranges, and repair allowance percentages have been established as set forth 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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20.5 Manufacture of food
and beverages--spe-
cial handling devi-
ces:
Includes assets-de-
fined as specialized
materials handling de-
vices such as returna-
ble pallets, palle-
tized containers, and
fish processing equip-
ment including boxes,
baskets, carts, and
flaking trays used in
activities as defined
in classes 20.1, 20.2,
20.3, 20.4. Special
handling devices are
specifically designed
for the handling of
particular products
and have no signifi-
cant utilitarian va-
lue and cannot be adap-
ted to further or dif-
ferent use after chan-
ges or improvements
are made in the design
of the particular pro-
duct handled by the
special devices. Does
not include general
purpose small tools
such as wrenches and
drills, both hand and
power-driven, and
other general purpose
equipment such as con-
veyors, transfer equip-
ment, and materials
handling devices _____ 3 4 5 20.0
30.11 Manufacture of rubber
products--special
tools and devices:
Includes assets de-
fined as special tools,
such as jigs, dies,
mandrels, molds, lasts,
patterns, specialty
containers, pallets,
shells and tire molds
and accessory parts
such as rings and in-
sert plates used in
activities as defined
in Class 30.1.
Does not include
tire building drums
and accessory parts
and general purpose
small tools such as
wrenches and drills,
both power and hand-
driven, and other ge-
neral purpose equip-
ment such as conveyors
and transfer equip-
ment _________________ 3 4 5 -
30.21 Manufacture of miscel-
laneous finished plas-
tic products--special
tools:
Includes assets de-
fined as special tools
such as jigs, dies,
fixtures, molds, pat-
terns, gauges, and
specialty transfer
and shipping devices,
used in activities as
defined in Class 30.2.
Special tools are spe-
cifically designed for
the production or pro-
cessing of particular
parts and have no sig-
nificant utilitarian
value and cannot be
adapted to further or
different use after
changes or improvements
are made in the model
design of the particu-
lar part produced by
the special tools.
Does not include gene-
ral purpose small
tools, such as wren-
ches and drills, both
hand and power-driven,
and other general pur-
pose equipment such
as conveyors, transfer
equipment, and mate-
rials handling devi-
ces __________________ 3 3.5 4 5.5
33.11 Manufacture of primary
ferrous metals--spe-
cial tools:
Includes assets de-
fined as special tools
such as dies, jigs,
molds, patterns, fix-
tures, gauges, and dra-
wings concerning such
special tools used in
the activities as de-
fined in Class 33.1,
Ferrous metals. Spe-
cial tools are speci-
fically designed for
the production or pro-
cessing of particular
products or parts and
have no significant
utilitarian value and
cannot be adapted to
further or different
use after changes or
improvements are made
in the model design of
the particular part
produced by the spe-
cial tools. Does not
include general pur-
pose small tools,
such as wrenches and
drills, both hand and
power-driven, and
other general purpose
equipment such as con-
veyors, transfer equip-
ment, and materials
handling devices.
Rolls, mandrels and
refractories are not
included in Class 33.11
but are included in
Class 33.1 ____________ 5 6.5 8 4.0
33.21 Manufacture of primary
nonferrous metals--
special tools:
Includes assets de-
fined as special tools
such as dies, jigs,
molds, patterns, fix-
tures, gauges, and
drawings concerning
such special tools
used in the activities
as defined in Class
33.2, Nonferrous
Metals. Special tools
are specifically de-
signed for the produc-
tion or processing of
particular products
or parts and have no
significant utilita-
rian value and can-
not be adapted to
further or different
use after changes or
improvements are made
in the model design
of the particular
part produced by the
special tools. Does
not include general
purpose small tools
such as wrenches and
drills, both hand and
power-driven, and other
general purpose equip-
ment such as conveyors,
transfer equipment, and
materials handling
devices.
Rolls, mandrels and
refractories are not
included in Class 33.21
but are included in
Class 33.2 ____________ 5 6.5 8 4
34.01 Manufacture of fabri-
cated metal products-
-special tools:
Includes assets de-
fined as special tools
such as dies, jigs,
molds, pattern, fix-
tures, gauges, and
returnable containers
and drawings concer-
ning such special tools
used in the activities
as defined in Class
34.0. Special tools are
specifically designed for
the production or pro-
cessing of particular
machine components,
products or parts, and
have no significant
utilitarian value and
cannot be adapted to
further or different
use after changes or
improvements are made
in the model design
of the particular part
produced by the spe-
cial tools. Does not
include general pur-
pose small tools such
as wrenches and drills,
both hand and power-
driven, and other gene-
ral purpose equipment
such as conveyors,
transfer equipment, and
materials handling
devices ______________ 2.5 3.0 3.5 3.5
35.11 Manufacture of metal-
working machinery--
special tools:
Includes assets
defined as special
tools, such as jigs,
dies, fixtures, molds,
patterns, gauges, and
specialty transfer and
shipping devices used
in activities as de-
fined in Class 35.1.
Special tools are spe-
cifically designed for
the production or pro-
cessing of particular
machine components
and have no significant
utilitarian value and
cannot be adapted to
further or different
use after changes or
improvements are made
in the model design of
the particular part
produced by the special
tools. Does not include
general purpose small
tools such as wrenches
and drills, both hand
and power-driven, and
other general purpose
equipment such as con-
veyors, transfer equip-
ment, and materials
handling devices _____ 5 6 7 12.5
35.21 Manufacture of other
machines--special
tools:
Includes assets de-
fined as special tools,
such as jigs, dies,
fixtures, molds, pat-
terns, gauges, and spe-
cialty transfer and
shipping devices used
in activities as defined
in Class 35.2. Special
tools are specifically
designed for the pro-
duction or processing
of particular machine
components and have no
significant utilitarian
value and cannot be
adapted to further or
different use after
changes or improvements
are made in the model
design or the parti-
cular part produced
by the special tools.
Does not include gene-
ral purpose small tools
such as wrenches and
drills, both hand and
power-driven, and other
general purpose equip-
ment such as conveyors,
transfer equipment, and
materials handling
devices ______________ 5 6.5 8 12.5
36.11 Manufacture of elec-
trical equipment--
special tools:
Includes assets de-
fined as special tools
such as jigs, dies,
molds, patterns, fix-
tures, gauges, return-
able containers, and
specialty transfer devi-
ces used in activities
as defined in Class
36.1. Special tools are
specifically designed
for the production or
processing of particular
machine components, pro-
ducts or parts, and have
no significant utilita-
rian value and cannot
be adapted to further
or different use after
changes or improvements
are made in the model
design of the particu-
lar part produced by
the special tools. Does
not include general
purpose small tools
such as wrenches and
drills, both hand and
power-driven and other
general purpose equip-
ment such as conveyors,
transfer equipment, and
materials handling
devices ______________ 4 5 6 -
37.33 Ships and boat building
--special tools:
Includes assets de-
fined as special tools
such as dies, jigs,
molds, patterns, fix-
tures, gauges, and dra-
wings concerning such
special tools used in
the activities as de-
fined in Classes 37.31
and 37.32. Special
tools are specifically
designed for the pro-
duction or processing
of particular machine
components, products
or parts, and have no
significant utilita-
rian value and cannot
be adapted to further
or different use after
changes or improvements
are made in the model
design of the particu-
lar part produced by
the special tools. Does
not include general
purpose small tools
such as wrenches and
drills, both hand and
power-driven, and other
general purpose equip-
ment such as conveyors,
transfer equipment, and
materials handling de-
vices ________________ 5 6.5 8 0.5
Sec. 3. Effect on Other Document.
.01 Rev. Proc. 72-10, 1972-1 C.B. 721, is modified by the supplemental asset guideline classes set forth in section 1 above with prescribed asset guideline depreciation periods, ranges, and repair allowance percentages set forth in section 2 above.
.02 In addition Rev. Proc. 73-25, 1973-2 C.B. 477, is modified to provide that subclass 37.12 is part of manufacturing class 37.11 for the purpose of the election provided for in section 1.167(a)-11(b)(5)(v) of the regulations and such subclass is not separately subject to possible exclusion from such election.
Sec. 4. Effective Date.
The asset guideline classes, periods, ranges, and repair allowance percentages for the activity classes set forth in section 2 are effective for property placed in service after December 31, 1973.
1 Also released as Technical Information Release 1300, 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
