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1.167(b)-0(a), Income Tax Regs. The taxpayer need only make a
reasonable approximation of the useful life of an asset that
bears a reasonable relationship to the taxpayer’s business
practice; absolute certainty is not required. Ames v.
Commissioner, 626 F.2d 693, 695-696 (9th Cir. 1980), affg. T.C.
Memo. 1977-249; Banc One Corp. v. Commissioner, 84 T.C. 476, 499
(1985), affd. without published opinion 815 F.2d 75 (6th Cir.
1987). The useful life, not the physical life, is relevant.
Ames v. Commissioner, supra at 695-696; Elec. & Neon, Inc. v.
Commissioner, 56 T.C. 1324, 1334 (1971), affd. without published
opinion 496 F.2d 876 (5th Cir. 1974). The useful life of an
asset has been defined as the “period for which it may reasonably
be expected to be employed in the taxpayer’s business.” Massey
Motors, Inc. v. United States, 364 U.S. 92, 107 (1960); Hertz
Corp. v. United States, 364 U.S. 122, 124 (1960); see also sec.
1.167(a)-1(b), Income Tax Regs. In petitioner’s business, the
useful life of an item begins when the item is placed in service
and ends when the item is withdrawn from service, regardless of
the physical condition of the item.
“[T]he determination of the useful life of an asset and the
other estimates utilized in computing depreciation must be based
upon facts existing as of the close of the taxable year in
issue.” Banc One Corp. v. Commissioner, supra at 499-500; see
also sec. 1.167(b)-0(a), Income Tax Regs. Some factors to
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