Section 24349(l) - Depreciation Based on Class Lives(1)Depreciation based on class lives for property placed in service after December 31, 1970. Federal Asset Depreciation Range (ADR) Regulation 1.167(a)(11) adopted by T.D. 7128 on June 23, 1971 as amended by T.D. 7272, April 20, 1973 and T.D. 7315, June 6, 1974 is hereby adopted by reference as though set out in full herein, subject to the following exceptions: (A) The permissible asset depreciation period for any asset guideline class shall be the asset guideline period without any range or variance.(B) Special rules with respect to the normalization of depreciation on public utility property are not applicable where they are at variance with provisions of the Revenue and Taxation Code.(C) An election to apply this subsection to eligible property shall be made with the return filed for the income year in which the property is first placed in service by the taxpayer. An election to compute the allowance for depreciation under this subsection is a method of accounting but consent of the Franchise Tax Board will be deemed granted to make an annual election. The election may be made with an amended return only if such amended return is filed no later than the time prescribed by law (including extensions thereof) for filing the return for the income year of election. In the case of an income year ending on or before December 31, 1975 (with respect to which the statute of limitations for assessment of deficiencies has not expired), the election may be made with an amended return only if such amended return is filed on or before March 15, 1977. If an election is not made within the time and manner prescribed in this subparagraph, no election may be made for such income year (by the filing of an amended return or any other manner) with respect to any eligible property placed in service in the income year.(D) Form FTB 3888 will be provided for the submission of required information to the Franchise Tax Board.(2)Depreciation based on class lives for property first placed in service before January 1, 1971. Federal Class Life System (CLS) Regulation 1.167(a)(12) adopted by T.D. 7278 on June 6, 1973 as amended by T.D. 7315, June 6, 1974, is hereby adopted by reference as though set out in full herein, subject to the following exceptions.(A) The revocation of the provisions of Revenue Procedure 62-21 shall not apply for income years ending before January 1, 197. A taxpayer may elect to be examined under the provisions of Revenue Procedure 62-21 for an income year ended before January 1, 1977 only in accordance with the rules set forth in 1.167(a)-12(f) of the Code of Federal Regulations.(B) An election to apply this subsection for an income year ending after December 31, 1970, is a method of accounting but the consent of the Franchise Tax Board will be deemed granted to make an annual election. An election to apply this subsection to qualified property for an income year shall be made with the return for that year. If the taxpayer does not file a timely return (taking into account extensions of time for filing) for the income year, the election shall be filed at the time the taxpayer files his first return for the year. The election may be made with an amended return only if such amended return is filed no later than the time prescribed by law (including extensions thereof) for filing the return for the income year of election. In the case of an income year ending on or before December 31, 1975 (with respect to which the statute of limitations for assessment of deficiencies has not expired), the election may be made with an amended return only if such amended return is filed on or before March 15, 1977. Form FTB 3887 will be provided for making the election and submission of required information.(C) An election under this Paragraph does not constitute permission to change the method of estimating salvage. Permission to change the manner of estimating salvage must be obtained by filing a request with the Franchise Tax Board within the time prescribed by Section 24651 and Regulation 24651(e)(3).(3)Conversion of Federal depreciation data. In order to eliminate the necessity of maintaining separate depreciation schedules for State and Federal tax purposes with respect to property which is covered by an election under paragraph (1) of this section and under Federal Asset Depreciation Range (ADR) Regulation 1.167(a)-11 or by an election under paragraph (2) of this section and Federal Class Life System (CLS) Regulation 1.167(a)-12, a taxpayer may apply to the Franchise Tax Board for an approval to adopt a method or formula for converting Federal ADR/CLS depreciation data into State depreciation data and to make such other adjustments as are required to base State depreciation computations upon Federal ADR/CLS depreciation data. The application shall be made on the tax return (or, in the case of an income year ending on or before December 31, 1975, the amended tax return referred to in subsections (1) and (2)) for the first income year in which such method or formula is to be used. It shall be the responsibility of the taxpayer to establish to the satisfaction of the Franchise Tax Board that any such method or formula does not produce depreciation allowances in excess of the amount permitted under the limitations provided in these regulations.Cal. Code Regs. Tit. 18, § 24349(l)
1. Repealer and new section filed 1-6-77; effective thirtieth day thereafter (Register 77, No. 2). Note: Authority cited: Section 26422, Revenue and Taxation Code. Reference: Section 24349, Revenue and Taxation Code.
1. Repealer and new section filed 1-6-77; effective thirtieth day thereafter (Register 77, No. 2).