Oregon Administrative Rules
Chapter 150 - DEPARTMENT OF REVENUE
Division 316 - PERSONAL INCOME TAX GENERAL PROVISIONS
Section 150-316-0567 - Property Subject to Accelerated Cost Recovery System

(A) For "after December 31, 1980" substitute "in taxable years beginning on or after January 1, 1985;"

(B) For "1980" substitute "the taxpayer's tax year which begins in 1984;" and

(C) For "January 1, 1981" substitute "the taxpayer's tax year which begins in 1985."

Example 1 : Dr. Randall Farwell purchased and placed in service $20,000 of dental equipment on January 18, 1984. Dr. Farwell is a calendar year taxpayer. The equipment is IRC Section 1245 class property. On June 1, 1985, Dr. Farwell decides to sell the equipment to Laura Ryan by contract under which Dr. Farwell will lease back and use the same dental equipment. Laura Ryan, is precluded from using the ACRS method because Dr. Farwell used the same equipment in a tax year prior to 1985.

Example 2 : Dee Brinlee purchased a house which she used as rental property in 1979. Dee is a calendar year taxpayer. Since 1984, she has been trying to sell her rental house. On July 2, 1985, she sold her rental house to her daughter Jennifer. Jennifer uses the house as rental property. The house is not recovery property to Jennifer since Jennifer bought the property from a "related person" who used it in tax years prior to January 1, 1985.

Example 3 : In 1980 through 1984, Gary Humphrey was in business as a sole proprietorship. Gary is a calendar year taxpayer and incorporates his business during 1985 with Gary as the sole shareholder. The depreciable personal and real property, having an adjusted basis of $50,000, was transferred to the corporation in a nontaxable transfer under IRC Section 351. Since the adjusted basis of the transferred property is carried over to the corporation, the corporation may not use ACRS with respect to the $50,000 transferred basis.