Monthly amortization deductions: | |
October: $240,000 divided by 60 | $4,000 |
November: $236,000 ($240,000 minus $4,000) divided by 59 | 4,000 |
December: $232,000 ($236,000 minus $4,000) divided by 58 | 4,000 |
Total amortization deduction for 1954 | 12,000 |
Facility No. 1 | |
Monthly amortization deductions: | |
August: $300,000 divided by 60 | $5,000 |
September: $269,630 ($300,000 minus $5,000 and $25,370) divided by 59 | 4,570 |
October: $265,060 ($269,630 minus $4,570) divided by 58 | 4,570 |
November: $260,490 ($265,060 minus $4,570) divided by 57 | 4,570 |
Amortization deduction for 1955 | 18,710 |
Facility No. 2 | |
Monthly amortization deductions: | |
September: $54,000 divided by 60 | $900 |
October: $53,100 divided by 59 | 900 |
November: $52,200 divided by 58 | 900 |
Amortization deduction for 1955 | 2,700 |
Total amortization deduction for 1955 | 21,410 |
Monthly amortization deductions: | |
January: $108,000 divided by 54 | $2,000 |
February: $106,000 ($108,000 minus $2,000) divided by 53 | 2,000 |
March: $104,000 ($106,000 minus $2,000) divided by 52 | 2,000 |
For the remaining nine months (similarly computed) | 18,000 |
Total amortization deduction for 1955 | 24,000 |
Since the Z Corporation elected in its return for 1954 to take amortization deductions with respect to such facility and to begin the 60-month amortization period with July 1954, it must compute its amortization deductions for the 12 months in the taxable year 1955 on the basis of the remaining months of the established 60-month amortization period, as indicated in the above computation.
26 C.F.R. §1.168A-1