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the straight line method, the cost or other basis of the property
less its estimated salvage value is deductible in equal annual
amounts over the period of the estimated useful life of the
property. Sec. 1.167(b)-1(a), Income Tax Regs. The allowance
for depreciation (amortization in the case of intangible assets)
for the taxable year is calculated by dividing (1) the adjusted
basis of the property at the beginning of the taxable year, less
salvage value, by (2) the remaining useful life of the property
at such time. Id.
Accordingly, under the straight line method, three elements
are necessary in order to properly compute a reasonable allowance
for amortization: (1) The adjusted basis of the property,
discussed infra; (2) the estimated remaining useful life; and (3)
31(...continued)
the taxable year, does not, during the first
two- thirds of the useful life of the
property, exceed the total of such allowances
which would have been used had such
allowances been computed under the method
described in paragraph (2).
(c) Limitations on Use of Certain Methods and Rates.--
Paragraphs (2), (3), and (4) of * * * [section 167(b)]
shall apply only in the case of property (other than
intangible property) described in * * * [section
167(a)] with a useful life of 3 years or more * * *
[Emphasis added.]
Thus, prior to OBRA-90, sec. 167(c) rendered the accelerated
amortization methods provided in sec. 167(b) inapplicable to
intangible assets, leaving only the straight line method.
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