Area Directive On MACRS Asset Categories For Refinery Property
Contact for crude oil price daily this Directive has been updated. Questions about crude oil price daily this directive ought to be directed to DCE PN, Douglas E. Toney.
April 8, 2002
MEMORANDUM FOR Trade Directors, LMSB
Administrators, Field SPECIALISTS AND Worldwide, LMSB
DIRECTOR, PREFILING AND TECHNICAL Steering, LMSB
Area COUNSEL, Natural Resources & Construction,
DIRECTOR OF REPORTING COMPLIANCE, SBSE
DEPUTY COMMISSIONER, TE/GE
FROM: Trade Director /s/ Bobby E. Scott
Natural Sources & crude oil price daily Construction, LMSB
Topic: Subject Directive on MACRS Asset Categories for Refinery Property
This memorandum is meant to offer route to effectively make the most of assets in the classification of petroleum refinery property for MACRS depreciation. This directive isn’t an official pronouncement of the law or the place of the Service and can’t be used, cited or relied upon as such.
Some taxpayers are in search of to change their methodology of depreciation for sure property utilized in petroleum refineries from Class thirteen.Three, Petroleum Refining to Class 28.Zero, Manufacture of Chemicals and Allied Products or other depreciation lessons. This memorandum gives path to examiners in determining whether or not belongings which are utilized in a variety of refinery operations must be classified as petroleum refining property.
It’s endorsed that examiners take the following positions:
– All processing belongings involved within the activity of petroleum refining are to be included in MACRS Asset Class 13.3. This would come with any incidental manufacturing or waste removing processes, which are integral parts of petroleum refining.
– In circumstances the place a taxpayer is engaged in a couple of industrial exercise, the activity by which the asset is primarily used controls the asset’s classification. For example, along with using MTBE produced primarily from intermediate refinery process streams as an additive in their very own gasoline mixing course of, a taxpayer may promote the MTBE produced to third events as a Petroleum Refinery Equipment For Sale finished chemical. Main use of the MTBE asset in both the refining exercise or the chemical manufacturing activity can be determinative as to which Asset Class (thirteen.Three or 28.Zero) is used.