[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.167(d)-1]

[Page 1008-1009]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.167(d)-1  Agreement as to useful life and rates of depreciation.

    After August 16, 1954, a taxpayer may, for taxable years ending 
after December 31, 1953, enter into an agreement with respect to the 
estimated useful life, method and rate of depreciation and treatment of 
salvage of any property which is subject to the allowance for 
depreciation. An application for such agreement may be made to the 
district director for the internal revenue district in which the 
taxpayer's return is required to be filed. Such application shall be 
filed in quadruplicate and shall contain in such detail as may be 
practical the following information:
    (a) The character and location of the property.
    (b) The original cost or other basis and date of acquisition.
    (c) Proper adjustments to the basis including depreciation 
accumulated to the first taxable year to be covered by the agreement.
    (d) Estimated useful life and estimated salvage value.
    (e) Method and rate of depreciation.
    (f) Any other facts and circumstances pertinent to making a 
reasonable estimate of the useful life of the property and its salvage 
value.

The agreement must be in writing and must be signed by the taxpayer and 
by the district director. The agreement must be signed in quadruplicate, 
and two of the signed copies will be returned to the taxpayer. The 
agreement

[[Page 1009]]

shall set forth its effective date, the estimated remaining useful life, 
the estimated salvage value, and rate and method of depreciation of the 
property and the facts and circumstances taken into consideration in 
adoption of the agreement, and shall relate only to depreciation 
allowances for such property on and after the effective date of the 
agreement. Such an agreement shall be binding on both parties until such 
time as facts and circumstances which were not taken into account in 
making the agreement are shown to exist. The party wishing to modify or 
change the agreement shall have the responsibility of establishing the 
existence of such facts and circumstances. Any change in the useful life 
or rate specified in such agreement shall be effective only 
prospectively, that is, it shall be effective beginning with the taxable 
year in which notice of the intention to change, including facts and 
circumstances warranting the adjustment of useful life and rate, is sent 
by the party proposing the change to the other party and is sent by 
registered mail, if such notice is mailed before September 3, 1958, or 
is sent by certified mail or registered mail, if such notice is mailed 
after September 2, 1958. A copy of the agreement (and any modification 
thereof) shall be filed with the taxpayer's return for the first taxable 
year which is affected by the agreement (or any modification thereof). A 
signed copy should be retained with the permanent records of the 
taxpayer. For rules relating to changes in method of depreciation, see 
Sec. 1.167(e)-1 and section 446 and the regulations thereunder.