Summary of Revenue Act of 1971 as Enacted Into Law Page: 1
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SUMMARY OF REVENUE ACT OF 1971 AS ENACTED INTO LAW
I. Job Development Investment Credit: Depreciation Revision
The act provides a 7-percent job development investment credit. The
credit is generally effective on August 15, 1971 (although also effective
with respect to earlier deliveries where orders were placed after the end
of March, 1971). At the same time, the act modifies the liberal deprecia-
tion system (Asset Depreciation Range) provided by administrative action in
January, 1971, to remove an element allowing full depreciation for assets
in the first partial year of their use (referred to as the first-year con-
vention). The modification in the depreciation system (ADR) offsets the
initial revenue impact of the investment credit by forestalling tax reduc-
tions which would otherwise occur as a result of administrative action.
The major detailed provisions are:
(1) The President may continue to deny the investment credit with re-
spect to foreign produced property after the 10 percent additional import
duty, originally imposed August 15, 1971, has been removed; and may re-
store the credit, retroactively to any date after August 15, 1971, on foreign
produced goods on a country-by-country and commodity-by-commodity basis.
(2) Up to $50,000 of used property is eligible for investment credit
in a year and this amount need not be reduced by investments in new property.
(3) Taxpayers other than public utilities, for purposes of reporting
to Federal agencies and making financial reports, may account for the tax
benefit of the investment credit either currently in the year in which the
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Leibowitz, George J. & Gravelle, Jane. Summary of Revenue Act of 1971 as Enacted Into Law, report, December 10, 1971; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc993879/m1/4/: accessed April 23, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.