Accelerated Cost Recovery System; MACRS; ADS (I.R.C. 168)

May 4, 2012


T.D. 8033: In T.D. 8033, issued under the 1954 Internal Revenue Code, as amended, the IRS indicated that “predominant use” (especially for purposes of sec. 168(h)(1)(D)) means use that is for more than 50 percent of the time.  See Topical Tax Brief; Treas. Reg. § 1.168(j)–1T.  The temporary regulations define the matter as follows:

‘‘Predominantly used’’ means that for more than 50 percent of the time used, as determined for each taxable year, the real or personal property is used in an unrelated trade or business the income of which is subject to tax under section 511 (determined without regard to the debt-financed income rules of section 514). If only a portion of property is predominantly used in an unrelated trade or business, the remainder may nevertheless be tax-exempt use property.