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1950-51 Theatre Catalog, 9th Edition, Page 156 (136)

1950-51 Theatre Catalog, 9th Edition
1950-51 Theatre Catalog
1950-51 Theatre Catalog, 9th Edition, Page 156
Page 156

1950-51 Theatre Catalog, 9th Edition, Page 156

TEN 'I'O FIFTEEN YEARS would apply to this Motiograph sound and prciection equipment and to the Strong lamps at the Valley. Elkview, West Virginia. Individual speakers at the Paducah. Paducah. Kentucky could be charged otf in three years. (Bottom) the relatively light box office buildings at the Lincoln. Philadelphia, Pennsylvania seem over assessed at 25 years due to severity of seasonal weather.

Official Word Still Sought

The publication of this information, warmly welcomed though it 'as by a countless number of drive-in theatre operators, gave added force to the demand for official advice from Washington on the subject. In answer to many inquiries from outdoor theatremen all over the country, the Editors of THEATRE CATALOG proceeded to write to the Honorable Francis J. Meyers, then U. S. Senator from Pennsylvania, with the request that he take the matter up with the proper authorities. Senator

Meyers generously consented to di5cuss the question with the Treasury Department, and a reply was received shortly thereafter from George J. Schoeneman, Commissioner of Internal Revenue.

Government Takes First Stand

In his letter Mr. Schoeneman stated: ". . . Section 29.23(1)-5 of Regulations III, applicable to the Internal Revenue Code, provides in part as follows: "(. . . The reasonableness of any claim for depreciation shall be determined upon the conditions known to exist at the end

of the period for which the return is made . . . The deduction for depreciation in respect of any depreciable property for any taxable year shall be limited to such ratable amount as may reasonably be considered necessary to recover during the remaining useful life of the property the unrecovered cost or other basis. The burden of proof will rest upon the taxpayer to sustain the deduction claimed . . .)

uIt is not possible for the Bureau of Internal Revenue prior to the close of a taxable year and in advance of the filing and examination of the Federal income tax return of a taxpayer, to make a definite ruling with respect to the lives to be used in the determination of allowable depreciation, since this is a question of fact which must be substantiated when the internal revenue agentgnakes his examination.

HThe industry about which you inquire is comparatively new, and as a result the Bureau has little information or experience upon which to rely for a definite conclusion as to the applicable rates pertaining to the depreciable assets. HOWever, for your information, the following approximate lives, subject, of course, to subsequent examination and approval by the Bureau, are suggested for drive-in theatre properties, until experience furnishes more data:

Commissioner Schoeneman Suggests:

Individual loud speakers 3yrs.

Screen 5 to 7 yrs. Wiring . . . . . . . . . . . . . . . . 10 to 15 yrs. Projectors and sundry

equipment , . . . . . . . . . . 10 to 15 yrs.

OHice buildings, including

projection room, ticket

ofhce, etc. (depending

up0n construction,

whether of wood or

brick) . . . . . . . . . . . . . . 25 to 50 yrs. Oil surfacing 5 to 10 yrs. Exposed signs . . . . . . . . . 5 yrs. Seasonal plumbing . . . . . 10 yrs.


While the figures contained in Commissioner Schoenemanls letter by no means constitute the final and complete word on the subject of depreciation for tax purposes in drive-in theatres, they do represent the first ofiicial statement on the matter made by a responsible government spokesman. It is to be assumed, therefore, that these figures may be safely used by drive-in operators in calculating depreciation on their equipment and as an authoritative reference source in discussing tax assessments with their local revenue agent. In all probability, field representatives of the Bureau of Internal Revenue will be more than willing to be guided by these figures direct from their Washington headquarters, and thus many existing inequities and disparities in depreciation rates throughout the country may be ironed out to the satisfaction of both drive-in operators and the Treasury Department.

1950-51 Theatre Catalog, 9th Edition, Page 156