Rev. Rul. 2014-17 - Asset class of tangible depreciable assets used in converting corn to fuel-grade ethanol 

May 20:  The IRS today released an advance copy of Rev. Rul. 2014-17 concerning the asset class for the depreciation of tangible assets that are used in converting corn to fuel-grade ethanol.

Read Rev. Rul. 2014-17 [PDF 25 KB]


The taxpayer owns a facility operated primarily to produce fuel grade ethanol from corn.

The taxpayer then sends the ethanol solution to distillation columns to separate the ethanol from the solids and water. After distillation, the taxpayer produces fuel grade ethanol by further processing part of the output using dehydration to increase alcohol content. Once the dehydration is complete, the taxpayer blends the fuel grade ethanol with 2% to 5% denaturant (such as natural gasoline or unleaded gasoline) and sends it to storage pending sale.

The taxpayer also processes the solids and other liquids derived from the distillation to produce distillers grains, an animal feed supplement, which it sells. More than 50% of the economic output at the facility is from fuel grade ethanol production.

Rev. Rul. 2014-17

The IRS concluded that the proper asset class for depreciation of tangible assets used in converting corn to fuel grade ethanol is asset class 49.5 (other than section 1250 property not described in asset class 49.5 and assets classified in asset classes 00.11 through 00.4 of Rev. Proc. 87-56).

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this


Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.

Email your contact information.

TaxNewsFlash-United States by year