Rev. Proc. 73-2
Rev. Proc. 73-2; 1973-1 C.B. 747
- Cross-Reference
(Also Part I, Section 167.)
- Code Sections
- 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Superseded by Rev.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 and section 1.167(a)-12 of the Income Tax Regulations new supplementary guideline classes, asset depreciation periods and ranges, and asset guideline class repair allowance percentages for "Information Systems," Class 70.12 to include certain prescribed computers and peripheral equipment and "Data Handling Equipment except Computers," Class 70.13 to include prescribed business machines and copier equipment.
Since computers, peripheral equipment, business machines and copier equipment assets were previously included in class 00.1 "Office Furniture, Fixtures, Machines and Equipment," that class of assets has been reexamined and the classes, periods and ranges, together with repair allowance percentages have been represcribed after detailed study into a new class 70.11 entitled "Office Furniture, Fixtures and Equipment." Both the new classes 70.12 and 70.13 and the represcribed class 70.11 are grouped under the new major subgroup of "Administrative Services," 70.1 under 70.0 "Services."
Section 2. Asset Guideline Classes and Periods, Asset Depreciation Ranges, and Annual Asset Guideline Repair Allowance Percentages for Administrative Services
The asset guideline classes, periods, ranges and repair allowance percentages have been established as set forth below.
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Asset
Asset Depreciation Guide-
Asset Range (in years) line
Guide- ---------------------- Annual
line Description of Assets Asset Repair
Class Included Lower Guide- Upper Allow-
limit line limit ance
Period Percent-
age
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70.0 Services:
70.1 Administrative Services:
Includes assets used in
administering normal
business transactions and
the maintenance of
business records, their
retrieval and analysis,
whether these services
are performed for others
or for taxpayer's own
account and whether the
assets are located in a
single location or widely
dispersed.
70.11 Office furniture,
fixtures, and equipment:
Includes furniture and
fixtures which are not a
structural component of
a building. Includes
such assets as desks,
files, safes, and
communications equipment
(not to include
communications equipment
which is included in
other ADR classes) _______ 8.0 10.0 12.0 2.0
70.12 Information systems:
Includes computers and
their peripheral
equipment (does not
include equipment that
is an integral part of
other capital equipment
and which is included in
other ADR classes of
economic activity, i.e.,
computers used primarily
for process or
production control,
switching and
channeling) ______________ 5.0 6.0 7.0 7.5
Information systems
defined:
1) Computers: A computer
is an electronically
activated device
capable of accepting
information, applying
prescribed processes
to the information
and supplying the
results of these
processes with or
without human
intervention. It
usually consists of a
central processing
unit containing
extensive storage,
logic, arithmetic and
control capabilities.
Excluded from this
category are adding
machines, electronic
desk calculators, etc.
2) Peripheral equipment
consists of the
auxiliary machines
which may be placed
under control of
the central processing
unit. Nonlimiting
examples are
Card readers, card
punches, magnetic
tape feeds, high
speed printers,
optical character
readers, tape
cassettes, mass
storage units, paper
tape equipment,
keypunches, data
entry devices,
teleprinters,
terminals, tape
drives, disc drives,
disc files, disc
packs, visual image
projector tubes, card
sorters, plotters,
collators.
Peripheral equipment
may be used on-line or
off-line.
70.13 Data Handling Equipment,
except Computers:
Includes typewriters,
calculators, adding and
accounting machines,
copiers and duplicating
equipment ________________ 5.0 6.0 7.0 15.0
70.2 Personal and Professional
Services:
Includes assets used in
the provision of personal
services such as those
offered by hotels and
motels, laundry and dry
cleaning establishments,
beauty and barber shops,
photographic studios and
mortuaries. Includes assets
used in the provision of
professional services such
as those offered by doctors,
dentists, lawyers,
accountants, architects,
engineers, and veterinarians
and which are not classified
in other ADR classes.
Includes assets used in the
provision of repair and
maintenance services and
those assets used in
providing fire and burglary
protection services and
which are not classified
in other ADR classes.
Includes equipment or
facilities used by cemetery
organizations, news
agencies, teletype wire
services, plumbing
contractors, frozen food
lockers, research
laboratories, hotels, and
motels and which are not
classified in other ADR
classes _____________________ 8 10 12 6.5
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Section 3. Effect on Documents
Revenue Procedure 72-10, 1972-1 C.B. 721 is modified to remove class 00.1 "Office Furniture, Fixtures and Equipment" and represcribe that class as 70.11 with the same title with represcribed asset guideline period, range and repair allowance percentage. In addition, Revenue Procedure 72-10, is supplemented by the addition of class 70.12, "Information Systems" and class 70.13 "Data Handling Equipment except Computers" with newly established asset guideline periods, ranges and repair allowance percentages.
Section 4. Effective Date
The asset guideline periods, ranges and repair allowance percentages for class 70.11 "Office Furniture, Fixtures and Equipment," class 70.12 "Information Systems," and class 70.13 "Data Handling Equipment except Computers" are effective for the property and the taxable years to which sections 1.167(a)-11 and 1.167(a)-12 of the regulations respectively apply. However, the taxpayer may at his option apply Revenue Procedure 72-10 without regard to this supplement for property placed in service in any such year beginning prior to January 1, 1973. Such option may be exercised for one such year and not for another or for all such years. The option shall be exercised in making the election to apply section 1.167(a)-11 or section 1.167(a)-12 of the regulations for such year and may not be revoked after the latest time for making such election and shall apply only with respect to the section for which exercised.
1 Also released as Technical Information Release 1223, dated December 29, 1972.
- Cross-Reference
(Also Part I, Section 167.)
- Code Sections
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
