Section 24352 - Change in Method(a) In General. Any change in the method of computing the depreciation allowances with respect to a particular account is a change in method of accounting, and such a change will be permitted only with the consent of the Franchise Tax Board, except that certain changes to the straight line method shall be permitted without consent as provided in Section 24352 and subsection (b) of this regulation. A change in method of computing depreciation will be permitted only with respect to all the assets contained in a particular account as defined in Reg. 24349(g). Any change in the percentage of the current straight line rate under the declining balance method, as for example, from 200 percent of the straight line rate to any other percent of the straight line rate, or any change in the interest factor used in connection with a compound interest or sinking fund method will constitute a change in method of depreciation and will require the consent of the Franchise Tax Board. Any request for a change in method of depreciation shall be made in accordance with Section 24651 and the regulations thereunder and shall state the character and location of the property, method of depreciation being used and the method proposed, the date of acquisition, the cost or other basis and adjustments thereto, amounts recovered through depreciation and other allowances, the estimated salvage value, the estimated remaining life of the property, and such other information as may be required.(b) Declining Balance to Straight Line. In the case of an account to which the method described in Section 24349(b)(2) is applicable, a taxpayer may change without the consent of the Franchise Tax Board, from the declining balance method of depreciation to the straight line method at any time during the useful life of the property under the following conditions. Such a change may not be made if a provision prohibiting such a change is contained in an agreement under Section 24351. When the change is made, the unrecovered cost or other basis (less a reasonable estimate for salvage) shall be recovered through annual allowances over the estimated remaining useful life determined in accordance with the circumstances existing at that time. With respect to any account, this change will be permitted only if applied to all the assets in the account as defined in Reg. 24349(g). The taxpayer shall furnish a statement with respect to the property which is the subject of the change showing the date of acquisition, cost or other basis, amounts recovered through depreciation and other allowances, the estimated salvage value, the character of the property, the remaining useful life of the property, and such other information as may be required. The statement shall be attached to the taxpayer's return for the income year in which the change is made. A change to the straight line method must be adhered to for the entire income year of the change and for all subsequent income years unless, with the consent of the Franchise Tax Board, a change to another method is permitted.Cal. Code Regs. Tit. 18, § 24352
1. New section filed 9-19-69; effective thirtieth day thereafter (Register 69, No. 38).[FN***]
This regulation is based on Section 26 CFR 1.167(e)-1 . Note: Authority cited: Section 26422, Revenue and Taxation Code.
1. New section filed 9-19-69; effective thirtieth day thereafter (Register 69, No. 38).