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Article: Rotable spare parts depreciable. (tax briefing).(Brief Article)
- Article from:
- The Practical Accountant
- Article date:
- May 1, 2003
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In Rev. Rul. 2003-37, the IRS says that taxpayers may treat rotable spare parts as depreciable assets if the facts are substantially similar to those in Hewlett Packard, Inc., (CA-FC, 1995) and Honeywell, Inc. and Subsidiaries, (CAS, 1994).
Hewlett Packard involved a computer manufacturer that provided maintenance and repair services under its product warranties and maintenance agreements. In conducting its computer maintenance business, the taxpayer operated a separate facility and sent technicians to customer locations. It maintained a pool of "rotable spare parts" obtained from its manufacturing facility. These were used to diagnose problems in customers' ...