85 STAT.]
PUBLIC LAW 92-178-DEC. 10, 1971
509
" (m) CLASS LIVES.—
"(1) IN GENERAL.—In the case of a taxpayer who has made an election under this subsection for the taxable year, the term "Reasonable 'reasonable allowance' as used in subsection (a) means (with ^"°^^"'=^'" respect to property which is placed in service during the taxable year and which is included in any class for which a class life has Deen prescribed) only an allowance based on the class life prescribed by the Secretary or his delegate which reasonably renects the anticipated useful life of that class of property to the industry or other group. The allowance so prescribed may (under regulations prescribed by the Secretary or his delegate) permit a variance from any class life by not more than 20 percent (rounded to the nearest half year) of such life. "(2)
CERTAIN FIRST-YEAR CONVENTIONS NOT PERMITTED.—No
convention with respect to the time at which assets are deemed placed in service shall be permitted under this section which generally would provide greater depreciation allowances during the taxable year in which the assets are placed in service than would be permitted if all assets were placed m service ratably throughout the year and if depreciation allowances were computed without regard to any convention. "(3) MAKING OF ELECTION.—An election under this subsection for any taxable year shall be made at such time, in such manner, and subject to such conditions as may be prescribed by the Secretary or his delegate by regulations." (b)
REASONABLE REPAIR A L I
^ANCE.—Section 263 (relating to ssstatTr^^'
capital expenditures) is amendea by adding at the end thereof the following new subsection: " (f) REASONABLE REPAIR ALLOWANCE.—The Secretary or his delegate may by regulations provide that che taxpayer may make an election under which amounts representing either repair expenses or specified repair, rehabilitation, or improvement expenditures for any class of depreciable property— "(1) are allowable as a deduction under section 162(a) or 212 (whichever is appropriate) to the extent of the repair allowance for that class, and "(2) to the extent such amounts exceed for the taxable year such repair allowance, are chargeable to capital account. Any allowance prescribed under this subsection shall reasonably reflect the anticipated repair experience of the class of property in the industry or other group." (c) RAILROAD ROLLING STOCK.—Section 263(e) (relating to expendi-
tures in connection with certain railroad rolling stock) is amended— (1) by striking out "shall be treated" and inserting in lieu thereof "shall, at the election of the taxpayer, be treated", and (2) by adding at the end thereof the following new sentences: "An election under this subsection shall be made for any taxable year at such time and in such manner as the Secretary or his delegate prescribes by regulations. A n election may not be made under this subsection for any taxable year to which an election under subsection (f) applies to railroad rolling stock (other than locomotives)." (d) EFFECTIVE DATES.—
(1) The amendments made by subsection (a) shall apply to property placed in service after December 31, 1970. (2) The amendment made by subsection (b) shall apply to taxable years ending after December 31, 1970. (3) The amendments made by subsection (c) shall apply to taxable years beginning after December 31, 1969.
26 USC 26*3.
^SA Stat. 4s,69.
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