Revenue procedure · 1972
Rev. Proc. 72-10
Rev. Proc. 72-10, 1972-1 C.B. 721
IRS revenue procedure
Audio summary
A short audio walkthrough of this rule: what it says and why it matters for your study.
What it holds
Created the elective Asset Depreciation Range system with over 100 asset guideline classes and a range of acceptable depreciation lives. Businesses could choose any life within the published range for each class. Applies to property placed in service after 1970.
Why it matters for your study: The ADR system is the direct predecessor to the MACRS class-life table in Rev. Proc. 87-56. The asset groupings and life ranges that ADR established were carried into modern MACRS. For pre-1981 property still on the books, ADR classes may still govern.
Where this comes from
Revenue Procedure 62-21 had created safe-harbor guideline lives in 1962. But it offered only a single life per class. Businesses had no flexibility within a class. Rev. Proc. 72-10 upgraded that system.
The new Asset Depreciation Range system gave over 100 asset guideline classes and, for each class, a range of acceptable lives. A business could elect any point within the range. This gave more flexibility while still keeping depreciation within IRS-approved parameters.
What it established
ADR was an elective system. A business that chose to use it had to apply it consistently for all assets in the elected class. ADR also included specific rules for how to handle retirements within a class, which was a practical improvement over the earlier system.
The procedure applied to property placed in service after 1970 and before 1981. After 1981, ACRS replaced it. After 1986, MACRS replaced ACRS.
How it connects to a study today
For modern property placed in service after 1986, Rev. Proc. 87-56 controls. ADR is not operative for a standard modern study.
However, if you own property placed in service between 1971 and 1980 under an ADR election, this procedure may still govern the depreciation analysis for those specific assets. Some taxpayers with long-lived industrial assets may still have ADR property on their books.
More broadly, the class structures ADR created were carried forward into MACRS. The 15-year land improvements class and the 5-year equipment classes in today's table trace their lineage through ADR.
What it does not mean
ADR is not operative authority for post-1986 property. Citing it for a current cost segregation position would be incorrect.
Its role is context. It explains the historical evolution of the class-life system and remains relevant for the narrow set of taxpayers with pre-1981 property still in service.
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This page explains a tax authority in plain words. It is not tax advice for your situation. The way this authority applies to your property is reviewed by a licensed tax professional. Citation is provided so you or your advisor can read the primary source.