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time for the taking of a deduction”. Sec. 1.446-1(e)(2)(ii)(b),
Income Tax Regs. Therefore, regardless of whether a change might
otherwise be deemed an unauthorized material alteration, the
change will not run afoul of section 446(e) if it falls within
this useful life exception.
Petitioner asks us to find that its revision of the recovery
period used in depreciating its gas stations is the equivalent of
an adjustment in useful life. Respondent, in contrast, argues
that the concept of useful life as employed under prior law
cannot be equated with the designation of a recovery period under
the current accelerated system.
Prior to the 1981 enactment of ACRS, depreciation deductions
were based on estimated useful life, meaning the period over
which an asset could reasonably be expected to be useful to the
taxpayer in his or her business or income-producing activities.
See Liddle v. Commissioner, 103 T.C. 285, 290 (1994), affd. 65
F.3d 329 (3d Cir. 1995). Then, with implementation of the
accelerated system, Congress mandated that depreciation
deductions be taken over one of a limited number of arbitrary
statutory periods. See id. at 291. Yet to the extent that
selection of a useful life under prior law or a recovery period
under current law determines the span of years over which
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