Rev. Proc. 74-50

Section 1. Purpose.

The purpose of this Revenue Procedure is to prescribe under section 1.167(a)-11 of the Income Tax Regulations a new asset guideline class, asset depreciation period and range, and annual repair allowance percentage, designated class 49.15 Electric utility combustion turbine production plant.

Under Rev. Proc. 72-10, 1972-1 C.B. 721, combustion turbines used by electric utilities to generate power were included in the prime load production class (i.e. hydraulic, steam, or nuclear) with which they were associated based upon location. This Revenue Procedure establishes a separate new guideline class for all electric utility combustion turbines except for those turbines operated in a combined cycle with a steam production plant. Combined cycle combustion turbines are physically integrated with steam production plants and as such are included in class 49.13 Electric utility steam production plant.

To modify previously published asset guideline classes consistent with this purpose, title 49.1 is eliminated and asset guideline classes 49.11 Electric utility hydraulic production plant, 49.12 Electric utility nuclear production plant, 49.13 Electric utility steam production plant, 49.14 Electric utility transmission and distribution plant are modified.

Sec. 2. Asset Guideline Classes, Periods, Asset Depreciation Ranges, and Annual Repair Allowance Percentages for the Electric Utility Activities Enumerated Below.

The asset guideline classes and asset guideline depreciation periods, ranges, and annual repair allowance percentages for the following electric utility activities are established as set forth below.

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Rev. Proc. 72-10 is modified by the prescription of class 49.15 Electric utility combustion turbine production plant, the elimination of title 49.1, and the modification of class 49.11, 49.12, 49.13, and 49.14. Only those asset guideline classes that are modified in any manner by this Revenue Procedure are described herein.

Sec. 4. Effective Date.

The asset guideline classes, periods, asset depreciation ranges, and annual repair allowance percentages for electric utility activities set forth in this Revenue Procedure are effective for property placed in service on or after December 9, 1974, the date of publication of this Revenue Procedure in the Internal Revenue Bulletin. However, the taxpayer may at his option apply Rev. Proc. 72-10, as previously modified, without regard to this supplement for such property for a taxable year beginning before December 9, 1974, and ending on or after that date. Such option shall be exercised in making the election to apply section 1.167(a)-11 of the regulations for such year and may not be revoked after the latest time for making such election.

¹ Also released as TIR-1316, dated November 15, 1974.