Tuesday, December 30, 2003

IRS Issues Field Service Memorandum for Restaurant Depreciation

WASHINGTON, DC - December 24, 2003 - NACS Online

The IRS issued a Field Service Memorandum on December 8, 2003, to its audit staff to provide direction when examining the depreciation deductions of businesses operating restaurants. Although the Field Service Memorandum is directed specifically to the restaurant industry, the guidelines include information that is also applicable to other retail businesses.

The directive includes a matrix that recommends the categorization and general depreciation system guidance for assets used in a restaurant business. The matrix sets out descriptive information for categorization of beverage equipment, fire-protection equipment, lighting fixtures, canopies, kitchen equipment, floors and floor coverings, security systems, landscaping, and other similar items. In many instances, IRS categorizes these items as ADR Class 57.0--Distributive Trades and Businesses with a five-year recovery period.

For more information about the IRS Field Service Memorandum, contact NACS Tax Counsel Allan Weiner at aweiner@colliershannon.com or (202) 342-8431.

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