Rev. Proc. 73-25
Rev. Proc. 73-25; 1973-2 C.B. 477
- 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.)
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
Superseded by Rev. Proc. 77-10 Modified by Rev. Proc. 74-30
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 revised and supplementary guideline classes, asset depreciation periods and ranges, and asset guideline class repair allowance percentages for class 37.1, "Manufacture of motor vehicles," class 37.11, "Motor vehicle manufacturing assets," and class 37.12, "Motor vehicle manufacturing subsidiary assets."
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.
To provide a supplemental asset guideline class which would include subsidiary assets, such assets as well as other section 1245 property used in motor vehicle manufacture and assembly have been studied and the guideline classes, guideline depreciation periods and ranges, and guideline repair allowance percentages represcribed.
Sec. 2. Asset Guideline Classes and Periods, Asset Depreciation Ranges, and Annual Asset Guideline Repair Allowance Percentages for Assets Used in the Manufacture of Motor Vehicles.
The asset guideline classes, periods, ranges, and repair allowance percentages have been established as set forth below.
---------------------------------------------------------------------
Annual
Asset Depreciation Asset
Asset Range (in years) Guide-
Guide- ---------------------- line
line Description of Assets Asset Repair
Class Included Lower Guide- Upper Allow-
limit line limit ance
Period Percent-
age
---------------------------------------------------------------------
37.1 Manufacture of Motor
Vehicles:
37.11 Motor vehicle
manufacturing assets _____ 9.5 12 14.5 9.5
Includes assets used in
the manufacture and
assembly of finished
automobiles, trucks,
trailers, motor homes,
and buses. Does not
include assets used in
mining, printing and
publishing, production
of primary metals,
electricity, or steam,
or the manufacture of
glass, industrial
chemicals, batteries,
or rubber products,
which are classified
elsewhere. Includes
assets used in
manufacturing
activities elsewhere
classified other than
those excluded
above,/4/ where such
activities are
incidental to and an
integral part of the
manufacture and
assembly of finished
motor vehicles such as
the manufacture of
parts and subassemblies
of fabricated metal
products, electrical
equipment, textiles,
plastics, leather, and
foundry and forging
operations.
Activities will be
considered incidental
to the manufacture and
assembly of finished
motor vehicles only if
75 percent or more of
the value of the
products produced under
one roof are used for
the manufacture and
assembly of finished
motor vehicles. Parts
37.11 Motor vehicle manufacturing
assets (continued)
which are produced as a
normal replacement stock
complement in connection
with the manufacture and
assembly of finished
motor vehicles are
considered used for the
manufacture and assembly
of finished motor
vehicles.
Does not include assets
used in the manufacture
of component parts if
these assets are used by
taxpayers not engaged in
the assembly of finished
motor vehicles.
37.12 Motor vehicle manufacturing
subsidiary assets __________ 2.5 3 3.5 12.5
Includes assets defined as
special tools, such as
jigs, dies, fixtures,
molds, patterns, gauges,
and specialty transfer
and shipping devices,
owned by manufacturers of
finished motor vehicles
and used in qualified
activities as defined
in Class 37.11. Special
tools are specifically
designed for the
production or processing
of particular motor
vehicle 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
conveyors, transfer
equipment, and materials
handling devices.
4 Does not include any assets not classified in manufacturing activity classes, e.g., does not include assets classified in asset guideline classes 00.1 through 00.3, 70.11 through 70.13 or 65.1 through 65.45.
Sec. 3. Effect on Other Documents.
Rev. Proc. 72-10, 1972-1 C.B. 721, is modified by the revised and supplementary guideline classes 37.1, "Manufacture of motor vehicles," 37.11, "Motor vehicle manufacturing assets," and 37.12, "Motor vehicle manufacturing subsidiary assets," with prescribed asset guideline depreciation periods, ranges, and repair allowance percentages.
Sec. 4. Effective Date.
The asset guideline periods, ranges, and repair allowance percentages for class 37.11, "Motor vehicle manufacturing assets," and class 37.12, "Motor vehicle manufacturing subsidiary assets," both subclasses of class 37.1, "Manufacture of motor vehicles," 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 Rev. Proc. 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 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 1252, September 4, 1973.
- 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.)
- LanguageEnglish
- Tax Analysts Electronic Citationnot available
