Class lives for utility grading costs.

AuthorRohrs, Jane

Prior to the enactment of the modified accelerated cost recovery system (MACRS), the Service ruled that the average useful lives for the initial clearing and grading for electric transmission lines and electric distribution lines were 84 years and 46 years, respectively. The holding was not incorporated in the MACRS asset classes. Thus, these assets were depreciated for MACRS over a seven-year recovery period. However, assets used in the transmission and distribution of electricity for sale were included in asset class 49.14, with a 20-year MACRS recovery period.

The same situation existed for gas utility trunk pipelines and related storage facilities. These assets were included in asset class 49.24, with a 15-year MACRS recovery period. Initial clearing and grade improvements were specifically excluded from asset class 49.24 and, thus, were not included in an...

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