Editor's Note:
Pub. L. 117-169,
Sec. 13703, amended Sec. 168 with a delayed effective date as indicated
below.
I.R.C. § 168(a) General Rule —
Except as otherwise provided in this section, the depreciation
deduction provided by section 167(a) for
any tangible property shall be determined by using—
I.R.C. § 168(a)(1) —
the applicable depreciation method,
I.R.C. § 168(a)(2) —
the applicable recovery period, and
I.R.C. § 168(a)(3) —
the applicable convention.
I.R.C. § 168(b) Applicable Depreciation Method —
For purposes of this section—
I.R.C. § 168(b)(1) In General —
Except as provided in paragraphs (2) and (3), the applicable
depreciation method is—
I.R.C. § 168(b)(1)(A) —
the 200 percent declining balance method,
I.R.C. § 168(b)(1)(B) —
switching to the straight line method
for the 1st taxable year for which using the straight line method
with respect to the adjusted basis as of the beginning of such year
will yield a larger allowance.
I.R.C. § 168(b)(2) 150 Percent Declining Balance Method In Certain Cases —
Paragraph (1) shall be applied by
substituting “150 percent” for “200 percent”
in the case of—
I.R.C. § 168(b)(2)(A) —
any 15-year or 20-year property not
referred to in paragraph (3),
I.R.C. § 168(b)(2)(B) —
any property (other than property described
in paragraph (3)) which is a qualified smart electric meter or qualified
smart electric grid system, or
I.R.C. § 168(b)(2)(C) —
any property (other than property described
in paragraph (3)) with respect to which the taxpayer elects under
paragraph (5) to have the provisions of this paragraph apply.
I.R.C. § 168(b)(3) Property To Which Straight Line Method Applies —
The applicable depreciation method
shall be the straight line method in the case of the following property:
I.R.C. § 168(b)(3)(A) —
Nonresidential real property.
I.R.C. § 168(b)(3)(B) —
Residential rental property.
I.R.C. § 168(b)(3)(C) —
Any railroad grading or tunnel bore.
I.R.C. § 168(b)(3)(D) —
Property with respect to which the taxpayer
elects under paragraph (5) to
have the provisions of this paragraph apply.
I.R.C. § 168(b)(3)(E) —
Property described in subsection (e)(3)(D)(ii).
I.R.C. § 168(b)(3)(F) —
Water utility property described in
subsection (e)(5).
I.R.C. § 168(b)(3)(G) —
Qualified improvement property described
in subsection (e)(6).
I.R.C. § 168(b)(5) Election —
An election under paragraph (2)(D) or (3)(D) may be made with respect
to 1 or more classes of property for any taxable year and once made
with respect to any class shall apply to all property in such class
placed in service during such taxable year. Such an election, once
made, shall be irrevocable.
I.R.C. § 168(c) Applicable Recovery Period
For purposes of this section, the applicable recovery
period shall be determined in accordance with the following table:
In the case of: | The applicable recovery period is: |
3-year property | 3 years |
5-year property | 5 years |
7-year property | 7 years |
10-year property | 10 years |
15-year property. | 15 years |
20-year property | 20 years |
Water utility property | 25 years |
Residential rental property | 27.5 years |
Nonresidential real property | 39 years |
Any railroad grading or tunnel bore | 50 years |
I.R.C. § 168(d) Applicable Convention —
For purposes of this section—
I.R.C. § 168(d)(1) In General —
Except as otherwise provided in this subsection, the
applicable convention is the half-year convention.
I.R.C. § 168(d)(2) Real Property —
In the case of—
I.R.C. § 168(d)(2)(A) —
nonresidential real property,
I.R.C. § 168(d)(2)(B) —
residential rental property, and
I.R.C. § 168(d)(2)(C) —
any railroad grading or tunnel bore,
the applicable
convention is the mid-month convention.
I.R.C. § 168(d)(3) Special Rule Where Substantial Property Placed In Service During
Last 3 Months Of Taxable Year
I.R.C. § 168(d)(3)(A) In General —
Except as provided in regulations, if during any taxable
year—
I.R.C. § 168(d)(3)(A)(i) —
the aggregate bases of property to which
this section applies placed in service during the last 3 months of
the taxable year, exceed
I.R.C. § 168(d)(3)(A)(ii) —
40 percent of the aggregate bases of
property to which this section applies placed in service during such
taxable year,
the applicable
convention for all property to which this section applies placed in
service during such taxable year shall be the mid-quarter convention.
I.R.C. § 168(d)(3)(B) Certain Property Not Taken Into Account —
For purposes of subparagraph (A), there shall not be taken
into account—
I.R.C. § 168(d)(3)(B)(i) —
any nonresidential real property, residential
rental property, and railroad grading or tunnel bore, and
I.R.C. § 168(d)(3)(B)(ii) —
any other property placed in service
and disposed of during the same taxable year.
I.R.C. § 168(d)(4) Definitions
I.R.C. § 168(d)(4)(A) Half-Year Convention —
The half-year convention is a convention which treats
all property placed in service during any taxable year (or disposed
of during any taxable year) as placed in service (or disposed of)
on the mid-point of such taxable year.
I.R.C. § 168(d)(4)(B) Mid-Month Convention —
The mid-month convention is a convention which treats
all property placed in service during any month (or disposed of during
any month) as placed in service (or disposed of) on the mid-point
of such month.
I.R.C. § 168(d)(4)(C) Mid-Quarter Convention —
The mid-quarter convention is a convention which treats
all property placed in service during any quarter of a taxable year
(or disposed of during any quarter of a taxable year) as placed in
service (or disposed of) on the mid-point of such quarter.
I.R.C. § 168(e) Classification Of Property —
For purposes of this section—
I.R.C. § 168(e)(1) In General
Except as otherwise provided in this subsection, property
shall be classified under the following table:
Property shall be treated as: | If such property has a class life (in years) of: |
3-year property | 4 or less |
5-year property | More than 4 but less than 10 |
7-year property | 10 or more but less than 16 |
10-year property | 16 or more but less than 20 |
15-year property | 20 or more but less than 25 |
20-year property | 25 or more. |
I.R.C. § 168(e)(2) Residential Rental Or Nonresidential Real Property
I.R.C. § 168(e)(2)(A) Residential Rental Property
I.R.C. § 168(e)(2)(A)(i) Residential Rental Property —
The term “residential rental property” means
any building or structure if 80 percent or more of the gross rental
income from such building or structure for the taxable year is rental
income from dwelling units.
I.R.C. § 168(e)(2)(A)(ii) Definitions —
For purposes of clause (i)—
I.R.C. § 168(e)(2)(A)(ii)(I) —
the term “dwelling unit”
means a house or apartment used to provide living accommodations in
a building or structure, but does not include a unit in a hotel, motel,
or other establishment more than one-half of the units in which are
used on a transient basis, and
I.R.C. § 168(e)(2)(A)(ii)(II) —
if any portion of the building or structure
is occupied by the taxpayer, the gross rental income from such building
or structure shall include the rental value of the portion so occupied.
I.R.C. § 168(e)(2)(B) Nonresidential Real Property —
The term “nonresidential real property”
means section 1250 property
which is not—
I.R.C. § 168(e)(2)(B)(i) —
residential rental property, or
I.R.C. § 168(e)(2)(B)(ii) —
property with a class life of less
than 27.5 years.
I.R.C. § 168(e)(3) Classification Of Certain Property
I.R.C. § 168(e)(3)(A) 3-Year Property —
The term “3-year property”
includes—
I.R.C. § 168(e)(3)(A)(i) —
any race horse—
I.R.C. § 168(e)(3)(A)(i)(I) —
which is placed in service before January
1, 2022, and
I.R.C. § 168(e)(3)(A)(i)(II) —
which is placed in service after December
31, 2021, and which is more than 2 years old at the time such horse
is placed in service by such purchaser,
I.R.C. § 168(e)(3)(A)(ii) —
any horse other than a race horse which
is more than 12 years old at the time it is placed in service, and
I.R.C. § 168(e)(3)(A)(iii) —
any qualified rent-to-own property.
I.R.C. § 168(e)(3)(B) 5-Year Property —
The term “5-year property”
includes—
I.R.C. § 168(e)(3)(B)(i) —
any automobile or light general purpose
truck,
I.R.C. § 168(e)(3)(B)(ii) —
any semi-conductor manufacturing equipment,
I.R.C. § 168(e)(3)(B)(iii) —
any computer-based telephone central
office switching equipment,
I.R.C. § 168(e)(3)(B)(iv) —
any qualified technological equipment,
I.R.C. § 168(e)(3)(B)(v) —
any section 1245 property used in connection
with research and experimentation,
I.R.C. § 168(e)(3)(B)(vi) —
any property which—
I.R.C. § 168(e)(3)(B)(vi)(I) —
is described in subparagraph (A) of
section 48(a)(3) (or
would be so described if “solar or wind energy” were substituted
for “solar energy” in clause (i) thereof and the last
sentence of such section did not apply to such subparagraph),
I.R.C. § 168(e)(3)(B)(vi)(II) —
is described in paragraph (15) of section 48(l) (as in effect on the day
before the date of the enactment of the Revenue Reconciliation Act
of 1990) and has a power production capacity of not greater than 80
megawatts, or
Editor's Note: Sec. 168(e)(3)(B)(vi)(III), below, before amendment
by Pub. L. 117-169, Sec. 13703(a)(1),is
effective for facilities and property placed in service before January
1, 2025.
I.R.C. § 168(e)(3)(B)(vi)(III) —
is described in section 48(l)(3)(A)(ix) (as
in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990), and
Editor's Note: Sec. 168(e)(3)(B)(vi)(III), below, after amendment
by Pub. L. 117-169, Sec. 13703(a)(1),
is effective for facilities and property placed in service after December
31, 2024.
I.R.C. § 168(e)(3)(B)(vi)(III) —
is described in section 48(l)(3)(A)(ix) (as
in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990),
Editor's Note: Sec. 168(e)(3)(B)(vii), below, before amendment
by Pub. L. 117-169, Sec. 13703(a)(2),
is effective for facilities and property placed in service before
January 1, 2025.
I.R.C. § 168(e)(3)(B)(vii) —
any machinery or equipment (other
than any grain bin, cotton ginning asset, fence, or other land improvement)
which is used in a farming business (as defined in section 263A(e)(4)), the original
use of which commences with the taxpayer after December 31, 2017.
Editor's Note: Sec. 168(e)(3)(B)(vii), below, after amendment
by Pub. L. 117-169, Sec. 13703(a)(2),
is effective for facilities and property placed in service after December
31, 2024.
I.R.C. § 168(e)(3)(B)(vii) —
any machinery or equipment (other
than any grain bin, cotton ginning asset, fence, or other land improvement)
which is used in a farming business (as defined in section 263A(e)(4)), the original
use of which commences with the taxpayer after December 31, 2017,
and
Editor's Note: Sec. 168(e)(3)(B)(viii), below, as added Pub. L. 117-169, Sec. 13703(a)(3), is effective
for facilities and property placed in service after December 31, 2024.
I.R.C. § 168(e)(3)(B)(viii) —
any qualified facility (as defined
in section 45Y(b)(1)(A)),
any qualified property (as defined in subsection (b)(2) of section 48E) which is a qualified investment
(as defined in subsection (b)(1) of
such section), or any energy storage technology (as defined in subsection (c)(2) of such section).
Nothing in any
provision of law shall be construed to treat property as not being
described in subclause (I) or (II) of clause (vi) by reason of being
public utility property.
I.R.C. § 168(e)(3)(C) 7-Year Property —
The term “7-year property” includes—
I.R.C. § 168(e)(3)(C)(i) —
any railroad track,
I.R.C. § 168(e)(3)(C)(ii) —
any motorsports entertainment complex,
I.R.C. § 168(e)(3)(C)(iii) —
any Alaska natural gas pipeline,
I.R.C. § 168(e)(3)(C)(iv) —
any natural gas gathering line the
original use of which commences with the taxpayer after April 11,
2005, and
I.R.C. § 168(e)(3)(C)(v) —
any property which—
I.R.C. § 168(e)(3)(C)(v)(I) —
does not have a class life, and
I.R.C. § 168(e)(3)(C)(v)(II) —
is not otherwise classified under paragraph (2) or this paragraph.
I.R.C. § 168(e)(3)(D) 10-Year Property —
The term “10-year property” includes—
I.R.C. § 168(e)(3)(D)(i) —
any single purpose agricultural or horticultural
structure (within the meaning of subsection (i)(13)),
I.R.C. § 168(e)(3)(D)(ii) —
any tree or vine bearing fruit or nuts,
I.R.C. § 168(e)(3)(D)(iii) —
any qualified smart electric meter,
and
I.R.C. § 168(e)(3)(D)(iv) —
any qualified smart electric grid system.
I.R.C. § 168(e)(3)(E) 15-Year Property —
The term “15-year property”
includes—
I.R.C. § 168(e)(3)(E)(i) —
any municipal wastewater treatment plant,
I.R.C. § 168(e)(3)(E)(ii) —
any telephone distribution plant and
comparable equipment used for 2-way exchange of voice and data communications,
I.R.C. § 168(e)(3)(E)(iii) —
any section 1250 property which is a retail
motor fuels outlet (whether or not food or other convenience items
are sold at the outlet),
I.R.C. § 168(e)(3)(E)(iv) —
initial clearing and grading land improvements
with respect to gas utility property,
I.R.C. § 168(e)(3)(E)(v) —
any section 1245 property (as defined in section 1245(a)(3)) used in the
transmission at 69 or more kilovolts of electricity for sale and the
original use of which commences with the taxpayer after April 11,
2005,
I.R.C. § 168(e)(3)(E)(vi) —
any natural gas distribution line the
original use of which commences with the taxpayer after April 11,
2005, and which is placed in service before January 1, 2011, and
I.R.C. § 168(e)(3)(E)(vii) —
any qualified improvement property.
I.R.C. § 168(e)(3)(F) 20-Year Property —
The term “20-year property” means initial
clearing and grading land improvements with respect to any electric
utility transmission and distribution plant.
I.R.C. § 168(e)(4) Railroad Grading Or Tunnel Bore —
The term “railroad grading or tunnel bore”
means all improvements resulting from excavations (including tunneling),
construction of embankments, clearings, diversions of roads and streams,
sodding of slopes, and from similar work necessary to provide, construct,
reconstruct, alter, protect, improve, replace, or restore a roadbed
or right-of-way for railroad track.
I.R.C. § 168(e)(5) Water Utility Property —
The term “water utility property” means
property—
I.R.C. § 168(e)(5)(A) —
which is an integral part of the gathering,
treatment, or commercial distribution of water, and which, without
regard to this paragraph, would be 20-year property, and
I.R.C. § 168(e)(5)(B) —
any municipal sewer.
I.R.C. § 168(e)(6) Qualified Improvement Property
I.R.C. § 168(e)(6)(A) In General —
The term “qualified improvement property”
means any improvement made by the taxpayer to an interior portion
of a building which is nonresidential real property if such improvement
is placed in service after the date such building was first placed
in service.
I.R.C. § 168(e)(6)(B) Certain Improvements Not Included —
Such term shall not include any improvement for which
the expenditure is attributable to—
I.R.C. § 168(e)(6)(B)(i) —
the enlargement of the building,
I.R.C. § 168(e)(6)(B)(ii) —
any elevator or escalator, or
I.R.C. § 168(e)(6)(B)(iii) —
the internal structural framework of
the building.
I.R.C. § 168(f) Property To Which Section Does Not Apply —
This section shall not apply to—
I.R.C. § 168(f)(1) Certain Methods Of Depreciation —
Any property if—
I.R.C. § 168(f)(1)(A) —
the taxpayer elects to exclude such
property from the application of this section, and
I.R.C. § 168(f)(1)(B) —
for the 1st taxable year for which a
depreciation deduction would be allowable with respect to such property
in the hands of the taxpayer, .
the property is properly depreciated
under the unit-of-production method or any method of depreciation
not expressed in a term of years (other than the retirement-replacement-betterment
method or similar method)
I.R.C. § 168(f)(2) Certain Public Utility Property —
Any public utility property (within the meaning of subsection (i)(10)) if the taxpayer does not
use a normalization method of accounting.
I.R.C. § 168(f)(4) Sound Recordings —
Any works which result from the fixation of a series
of musical, spoken, or other sounds, regardless of the nature of the
material (such as discs, tapes, or other phonorecordings) in which
such sounds are embodied.
I.R.C. § 168(f)(5) Certain Property Placed In Service In Churning Transactions
I.R.C. § 168(f)(5)(A) In General —
Property—
I.R.C. § 168(f)(5)(A)(i) —
described in paragraph (4) of section
168(e) (as in effect before the amendments made by the Tax Reform
Act of 1986), or
I.R.C. § 168(f)(5)(A)(ii) —
which would be described in such paragraph
if such paragraph were applied by substituting “1987”
for “1981” and “1986” for “1980”
each place such terms appear.
I.R.C. § 168(f)(5)(B) Subparagraph (A)(ii) Not To Apply —
Clause (ii) of
subparagraph (A) shall
not apply to—
I.R.C. § 168(f)(5)(B)(i) —
any residential rental property or nonresidential
real property,
I.R.C. § 168(f)(5)(B)(ii) —
any property if, for the 1st taxable
year in which such property is placed in service—
I.R.C. § 168(f)(5)(B)(ii)(I) —
the amount allowable as a deduction
under this section (as in effect before the date of the enactment
of this paragraph) with respect to such property is greater than,
I.R.C. § 168(f)(5)(B)(ii)(II) —
the amount allowable as a deduction
under this section (as in effect on or after such date and using the
half-year convention) for such taxable year, or
I.R.C. § 168(f)(5)(B)(iii) —
any property to which this section
(as amended by the Tax Reform Act of 1986) applied in the hands of
the transferor.
I.R.C. § 168(f)(5)(C) Special Rule —
In the case of any property to which this section would
apply but for this paragraph, the depreciation deduction under section 167 shall be determined under the
provisions of this section as in effect before the amendments made
by section 201 of the Tax Reform Act of 1986.
I.R.C. § 168(g) Alternative Depreciation System For Certain Property
I.R.C. § 168(g)(1) In General —
In the case of—
I.R.C. § 168(g)(1)(A) —
any tangible property which during the
taxable year is used predominantly outside the United States,
I.R.C. § 168(g)(1)(B) —
any tax-exempt use property,
I.R.C. § 168(g)(1)(C) —
any tax-exempt bond financed property,
I.R.C. § 168(g)(1)(D) —
any imported property covered by an
Executive order under paragraph (6),
I.R.C. § 168(g)(1)(E) —
any property to which an election under
paragraph (7) applies,
I.R.C. § 168(g)(1)(F) —
any property described in paragraph (8), and
I.R.C. § 168(g)(1)(G) —
any property with a recovery period of
10 years or more which is held by an electing farming business (as
defined in section 163(j)(7)(C)),
the depreciation deduction provided
by section 167(a) shall
be determined under the alternative depreciation system.
I.R.C. § 168(g)(2) Alternative Depreciation System —
For purposes of paragraph (1), the alternative depreciation
system is depreciation determined by using—
I.R.C. § 168(g)(2)(A) —
the straight line method (without regard
to salvage value),
I.R.C. § 168(g)(2)(B) —
the applicable convention determined
under subsection (d), and
I.R.C. § 168(g)(2)(C)
a recovery period determined under the
following table:
The recovery period shall be: | In the case of: |
(i) Property not described in clause (ii) or (iii) | The class life. |
(ii) Personal property with no class life | 12 years. |
(iii) Residential rental property | 30 years. |
(iv) Nonresidential real property | 40 years. |
(v) Any railroad grading or tunnel bore or water utility property | 50 years. |
I.R.C. § 168(g)(3) Special Rules For Determining Class Life
I.R.C. § 168(g)(3)(A) Tax-Exempt Use Property Subject To Lease —
In the case of any tax-exempt use property subject to
a lease, the recovery period used for purposes of paragraph (2) shall (notwithstanding any other
subparagraph of this paragraph) in no event be less than 125 percent
of the lease term.
I.R.C. § 168(g)(3)(B) Special Rule For Certain Property Assigned To Classes —
For purposes of paragraph (2), in the case of property described
in any of the following subparagraphs of subsection (e)(3), the class life shall be
determined as follows:
If property is described in subparagraph: | The class life is: |
(A)(iii) | 4 |
(B)(ii) | 5 |
(B)(iii) | 9.5 |
(B)(vii) | 10 |
(C)(i) | 10 |
(C)(iii) | 22 |
(C)(iv) | 14 |
(D)(i) | 15 |
(D)(ii) | 20 |
(E)(i) | 24 |
(E)(ii) | 24 |
(E)(iii) | 20 |
(E)(iv) | 20 |
(E)(v) | 30 |
(E)(vi) | 35 |
(E)(vii) | 20 |
(F) | 25 |
I.R.C. § 168(g)(3)(C) Qualified Technological Equipment —
In the case of any qualified technological equipment,
the recovery period used for purposes of paragraph (2) shall be 5
years.
I.R.C. § 168(g)(3)(D) Automobiles, Etc. —
In the case of any automobile or light general purpose
truck, the recovery period used for purposes of paragraph (2) shall
be 5 years.
I.R.C. § 168(g)(3)(E) Certain Real Property —
In the case of any section 1245 property which is real property
with no class life, the recovery period used for purposes of paragraph
(2) shall be 40 years.
I.R.C. § 168(g)(4) Exception For Certain Property Used Outside United States —
Subparagraph (A) of
paragraph (1) shall not
apply to—
I.R.C. § 168(g)(4)(A) —
any aircraft which is registered by
the Administrator of the Federal Aviation Agency and which is operated
to and from the United States or is operated under contract with the
United States;
I.R.C. § 168(g)(4)(B) —
rolling stock which is used within and
without the United States and which is—
I.R.C. § 168(g)(4)(B)(i) —
of a rail carrier subject to part A
of subtitle IV of title 49, or
I.R.C. § 168(g)(4)(B)(ii) —
of a United States person (other than
a corporation described in clause (i)) but only if the rolling stock
is not leased to one or more foreign persons for periods aggregating
more than 12 months in any 24-month period;
I.R.C. § 168(g)(4)(C) —
any vessel documented under the laws
of the United States which is operated in the foreign or domestic
commerce of the United States;
I.R.C. § 168(g)(4)(D) —
any motor vehicle of a United States
person (as defined in section 7701(a)(30))
which is operated to and from the United States;
I.R.C. § 168(g)(4)(E) —
any container of a United States person
which is used in the transportation of property to and from the United
States;
I.R.C. § 168(g)(4)(F) —
any property (other than a vessel or
an aircraft) of a United States person which is used for the purpose
of exploring for, developing, removing, or transporting resources
from the outer Continental Shelf (within the meaning of section 2 of the Outer Continental Shelf
Lands Act, as amended and supplemented; (43
U.S.C. 1331));
I.R.C. § 168(g)(4)(G) —
any property which is owned by a domestic
corporation or by a United States citizen (other than a citizen entitled
to the benefits of section 931 or 933) and which is used predominantly
in a possession of the United States by such a corporation or such
a citizen, or by a corporation created or organized in, or under the
law of, a possession of the United States;
I.R.C. § 168(g)(4)(H) —
any communications satellite (as defined
in section 103(3) of
the Communications Satellite Act of 1962, 47
U.S.C. 702(3)), or any interest therein, of a United States
person;
I.R.C. § 168(g)(4)(I) —
any cable, or any interest therein,
of a domestic corporation engaged in furnishing telephone service
to which section 168(i)(10)(C) applies
(or of a wholly owned domestic subsidiary of such a corporation),
if such cable is part of a submarine cable system which constitutes
part of a communication link exclusively between the United States
and one or more foreign countries;
I.R.C. § 168(g)(4)(J) —
any property (other than a vessel or
an aircraft) of a United States person which is used in international
or territorial waters within the northern portion of the Western Hemisphere
for the purpose of exploring for, developing, removing, or transporting
resources from ocean waters or deposits under such waters;
I.R.C. § 168(g)(4)(K) —
any property described in section 48(l)(3)(A)(ix) (as
in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990) which is owned by a United States person
and which is used in international or territorial waters to generate
energy for use in the United States; and
I.R.C. § 168(g)(4)(L) —
any satellite (not described in subparagraph (H)) or other spacecraft (or
any interest therein) held by a United States person if such satellite
or other spacecraft was launched from within the United States.
For purposes
of subparagraph (J),
the term “northern portion of the Western Hemisphere”
means the area lying west of the 30th meridian west of Greenwich,
east of the international dateline, and north of the Equator, but
not including any foreign country which is a country of South America.
I.R.C. § 168(g)(5) Tax-Exempt Bond Financed Property —
For purposes of this subsection—
I.R.C. § 168(g)(5)(A) In General —
Except as otherwise provided in this paragraph, the
term “tax-exempt bond financed property” means any property
to the extent such property is financed (directly or indirectly) by
an obligation the interest on which is exempt from tax under section 103(a).
I.R.C. § 168(g)(5)(B) Allocation Of Bond Proceeds —
For purposes of subparagraph (A), the proceeds of any obligation
shall be treated as used to finance property acquired in connection
with the issuance of such obligation in the order in which such property
is placed in service.
I.R.C. § 168(g)(5)(C) Qualified Residential Rental Projects —
The term “tax-exempt bond financed property”
shall not include any qualified residential rental project (within
the meaning of section 142(a)(7)).
I.R.C. § 168(g)(6) Imported Property
I.R.C. § 168(g)(6)(A) Countries Maintaining Trade Restrictions Or Engaging In Discriminatory
Acts —
If the President determines that a foreign country—
I.R.C. § 168(g)(6)(A)(i) —
maintains nontariff trade restrictions,
including variable import fees, which substantially burden United
States commerce in a manner inconsistent with provisions of trade
agreements, or
I.R.C. § 168(g)(6)(A)(ii) —
engages in discriminatory or other
acts (including tolerance of international cartels) or policies unjustifiably
restricting United States commerce,
the President may by Executive order
provide for the application of paragraph (1)(D) to any article or class
of articles manufactured or produced in such foreign country for such
period as may be provided by such Executive order. Any period specified
in the preceding sentence shall not apply to any property ordered
before (or the construction, reconstruction, or erection of which
began before) the date of the Executive order unless the President
determines an earlier date to be in the public interest and specifies
such date in the Executive order.
I.R.C. § 168(g)(6)(B) Imported Property —
For purposes of this subsection, the term “imported
property” means any property if—
I.R.C. § 168(g)(6)(B)(i) —
such property was completed outside
the United States, or
I.R.C. § 168(g)(6)(B)(ii) —
less than 50 percent of the basis of
such property is attributable to value added within the United States.
For purposes of this subparagraph,
the term “United States” includes the Commonwealth of
Puerto Rico and the possessions of the United States.
I.R.C. § 168(g)(7) Election To Use Alternative Depreciation System
I.R.C. § 168(g)(7)(A) In General —
If the taxpayer makes an election under this paragraph
with respect to any class of property for any taxable year, the alternative
depreciation system under this subsection shall apply to all property
in such class placed in service during such taxable year. Notwithstanding
the preceding sentence, in the case of nonresidential real property
or residential rental property, such election may be made separately
with respect to each property.
I.R.C. § 168(g)(7)(B) Election Irrevocable —
An election under subparagraph (A), once made, shall be irrevocable.
I.R.C. § 168(g)(8) Electing Real Property Trade Or Business —
The property described in this paragraph
shall consist of any nonresidential real property, residential rental
property, and qualified improvement property held by an electing real
property trade or business (as defined in 163(j)(7)(B)).
I.R.C. § 168(h) Tax-Exempt Use Property
I.R.C. § 168(h)(1) In General —
For purposes of this section—
I.R.C. § 168(h)(1)(A) Property Other Than Nonresidential Real Property —
Except as otherwise provided in this subsection, the
term “tax-exempt use property” means that portion of any
tangible property (other than nonresidential real property) leased
to a tax-exempt entity.
I.R.C. § 168(h)(1)(B) Nonresidential Real Property
I.R.C. § 168(h)(1)(B)(i) In General —
In the case of nonresidential real property, the term “tax-exempt
use property” means that portion of the property leased to a
tax-exempt entity in a disqualified lease.
I.R.C. § 168(h)(1)(B)(ii) Disqualified Lease —
For purposes of this subparagraph, the term “disqualified
lease” means any lease of the property to a tax-exempt entity,
but only if—
I.R.C. § 168(h)(1)(B)(ii)(I) —
part or all of the property was financed
(directly or indirectly) by an obligation the interest on which is
exempt from tax under section 103(a) and
such entity (or a related entity) participated in such financing,
I.R.C. § 168(h)(1)(B)(ii)(II) —
under such lease there is a fixed or
determinable price purchase or sale option which involves such entity
(or a related entity) or there is the equivalent of such an option,
I.R.C. § 168(h)(1)(B)(ii)(III) —
such lease has a lease term in excess
of 20 years, or
I.R.C. § 168(h)(1)(B)(ii)(IV) —
such lease occurs after a sale (or
other transfer) of the property by, or lease of the property from,
such entity (or a related entity) and such property has been used
by such entity (or a related entity) before such sale (or other transfer)
or lease.
I.R.C. § 168(h)(1)(B)(iii) 35-Percent Threshold Test —
Clause (i) shall
apply to any property only if the portion of such property leased
to tax-exempt entities in disqualified leases is more than 35 percent
of the property.
I.R.C. § 168(h)(1)(B)(iv) Treatment Of Improvements —
For purposes of this subparagraph, improvements to a
property (other than land) shall not be treated as a separate property.
I.R.C. § 168(h)(1)(B)(v) Leasebacks During 1st 3 Months Of Use Not Taken Into Account —
Subclause (IV) of
clause (ii) shall
not apply to any property which is leased within 3 months after the
date such property is first used by the tax-exempt entity (or a related
entity).
I.R.C. § 168(h)(1)(C) Exception For Short-Term Leases
I.R.C. § 168(h)(1)(C)(i) In General —
Property shall not be treated as tax-exempt use property
merely by reason of a short-term lease.
I.R.C. § 168(h)(1)(C)(ii) Short-Term Lease —
For purposes of clause (i), the term “short-term
lease” means any lease the term of which is—
I.R.C. § 168(h)(1)(C)(ii)(I) —
less than 3 years, and
I.R.C. § 168(h)(1)(C)(ii)(II) —
less than the greater of 1 year or
30 percent of the property's present class life.
In the case of nonresidential real
property and property with no present class life, subclause (II) shall not apply.
I.R.C. § 168(h)(1)(D) Exception Where Property Used In Unrelated Trade Or Business —
The term “tax-exempt use property” shall
not include any portion of a property if such portion is predominantly
used by the tax-exempt entity (directly or through a partnership of
which such entity is a partner) in an unrelated trade or business
the income of which is subject to tax under section 511. For purposes of subparagraph (B)(iii), any portion of
a property so used shall not be treated as leased to a tax-exempt
entity in a disqualified lease.
I.R.C. § 168(h)(1)(E) Nonresidential Real Property Defined —
For purposes of this paragraph, the term “nonresidential
real property” includes residential rental property.
I.R.C. § 168(h)(2) Tax-Exempt Entity
I.R.C. § 168(h)(2)(A) In General —
For purposes of this subsection, the term “tax-exempt
entity” means—
I.R.C. § 168(h)(2)(A)(i) —
the United States, any State or political
subdivision thereof, any possession of the United States, or any agency
or instrumentality of any of the foregoing,
I.R.C. § 168(h)(2)(A)(ii) —
an organization (other than a cooperative
described in section 521)
which is exempt from tax imposed by this chapter,
I.R.C. § 168(h)(2)(A)(iii) —
any foreign person or entity, and
I.R.C. § 168(h)(2)(A)(iv) —
any Indian tribal government described
in section 7701(a)(40).
For purposes
of applying this subsection, any Indian tribal government referred
to in clause (iv) shall
be treated in the same manner as a State.
I.R.C. § 168(h)(2)(B) Exception For Certain Property Subject To United States Tax
And Used By Foreign Person Or Entity —
Clause (iii) of
subparagraph (A) shall
not apply with respect to any property if more than 50 percent of
the gross income for the taxable year derived by the foreign person
or entity from the use of such property is—
I.R.C. § 168(h)(2)(B)(i) —
subject to tax under this chapter, or
I.R.C. § 168(h)(2)(B)(ii) —
included under section 951 in the gross income of a United
States shareholder for the taxable year with or within which ends
the taxable year of the controlled foreign corporation in which such
income was derived.
For purposes of the preceding sentence,
any exclusion or exemption shall not apply for purposes of determining
the amount of the gross income so derived, but shall apply for purposes
of determining the portion of such gross income subject to tax under
this chapter.
I.R.C. § 168(h)(2)(C) Foreign Person Or Entity —
For purposes of this paragraph, the term “foreign
person or entity” means—
I.R.C. § 168(h)(2)(C)(i) —
any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing,
and
I.R.C. § 168(h)(2)(C)(ii) —
any person who is not a United States
person.
Such term does not include any foreign
partnership or other foreign pass-thru entity.
I.R.C. § 168(h)(2)(D) Treatment Of Certain Taxable Instrumentalities —
For purposes of this subsection, a corporation shall
not be treated as an instrumentality of the United States or of any
State or political subdivision thereof if—
I.R.C. § 168(h)(2)(D)(i) —
all of the activities of such corporation
are subject to tax under this chapter, and
I.R.C. § 168(h)(2)(D)(ii) —
a majority of the board of directors
of such corporation is not selected by the United States or any State
or political subdivision thereof.
I.R.C. § 168(h)(2)(E) Certain Previously Tax-Exempt Organizations
I.R.C. § 168(h)(2)(E)(i) In General —
For purposes of this subsection, an organization shall
be treated as an organization described in subparagraph (A)(ii) with respect to any
property (other than property held by such organization) if such organization
was an organization (other than a cooperative described in section 521) exempt from tax imposed by
this chapter at any time during the 5-year period ending on the date
such property was first used by such organization. The preceding sentence
and subparagraph (D)(ii) shall
not apply to the Federal Home Loan Mortgage Corporation.
I.R.C. § 168(h)(2)(E)(ii) Election Not To Have Clause (i) Apply
I.R.C. § 168(h)(2)(E)(ii)(I) In General —
In the case of an organization formerly exempt from
tax under section 501(a) as
an organization described in section 501(c)(12), clause (i) shall not apply to such
organization with respect to any property if such organization elects
not to be exempt from tax under section 501(a) during the tax-exempt
use period with respect to such property.
I.R.C. § 168(h)(2)(E)(ii)(II) Tax-Exempt Use Period —
For purposes of subclause (I), the term “tax-exempt
use period” means the period beginning with the taxable year
in which the property described in subclause (I) is first used by the
organization and ending with the close of the 15th taxable year following
the last taxable year of the applicable recovery period of such property.
I.R.C. § 168(h)(2)(E)(ii)(III) Election —
Any election under subclause (I), once made, shall
be irrevocable.
I.R.C. § 168(h)(2)(E)(iii) Treatment Of Successor Organizations —
Any organization which is engaged in activities substantially
similar to those engaged in by a predecessor organization shall succeed
to the treatment under this subparagraph of such predecessor organization.
I.R.C. § 168(h)(2)(E)(iv) First Used —
For purposes of this subparagraph, property shall be
treated as first used by the organization—
I.R.C. § 168(h)(2)(E)(iv)(I) —
when the property is first placed in
service under a lease to such organization, or
I.R.C. § 168(h)(2)(E)(iv)(II) —
in the case of property leased to (or
held by) a partnership (or other pass-thru entity) in which the organization
is a member, the later of when such property is first used by such
partnership or pass-thru entity or when such organization is first
a member of such partnership or pass-thru entity.
I.R.C. § 168(h)(3) Special Rules For Certain High Technology Equipment
I.R.C. § 168(h)(3)(A) Exemption Where Lease Term Is 5 Years Or Less —
For purposes of this section, the term “tax-exempt
use property” shall not include any qualified technological
equipment if the lease to the tax-exempt entity has a lease term of
5 years or less. Notwithstanding subsection (i)(3)(A)(i), in determining
a lease term for purposes of the preceding sentence, there shall not
be taken into account any option of the lessee to renew at the fair
market value rent determined at the time of renewal; except that the
aggregate period not taken into account by reason of this sentence
shall not exceed 24 months.
I.R.C. § 168(h)(3)(B) Exception For Certain Property
I.R.C. § 168(h)(3)(B)(i) In General —
For purposes of subparagraph (A), the term “qualified
technological equipment” shall not include any property leased
to a tax-exempt entity if—
I.R.C. § 168(h)(3)(B)(i)(I) —
part or all of the property was financed
(directly or indirectly) by an obligation the interest on which is
exempt from tax under section 103(a),
I.R.C. § 168(h)(3)(B)(i)(II) —
such lease occurs after a sale (or
other transfer) of the property by, or lease of such property from,
such entity (or related entity) and such property has been used by
such entity (or a related entity) before such sale (or other transfer)
or lease, or
I.R.C. § 168(h)(3)(B)(i)(III) —
such tax-exempt entity is the United
States or any agency or instrumentality of the United States.
I.R.C. § 168(h)(3)(B)(ii) Leasebacks During 1st 3 Months Of Use Not Taken Into Account —
Subclause (II) of
clause (i) shall
not apply to any property which is leased within 3 months after the
date such property is first used by the tax-exempt entity (or a related
entity).
I.R.C. § 168(h)(4) Related Entities —
For purposes of this subsection—
I.R.C. § 168(h)(4)(A)
I.R.C. § 168(h)(4)(A)(i) —
Each governmental unit and each agency
or instrumentality of a governmental unit is related to each other
such unit, agency, or instrumentality which directly or indirectly
derives its powers, rights, and duties in whole or in part from the
same sovereign authority.
I.R.C. § 168(h)(4)(A)(ii) —
For purposes of clause (i), the United States, each
State, and each possession of the United States shall be treated as
a separate sovereign authority.
I.R.C. § 168(h)(4)(B) —
Any entity not described in subparagraph (A)(i) is related to any other
entity if the 2 entities have—
I.R.C. § 168(h)(4)(B)(i) —
significant common purposes and substantial
common membership, or
I.R.C. § 168(h)(4)(B)(ii) —
directly or indirectly substantial
common direction or control.
I.R.C. § 168(h)(4)(C)
I.R.C. § 168(h)(4)(C)(i) —
An entity is related to another entity
if either entity owns (directly or through 1 or more entities) a 50
percent or greater interest in the capital or profits of the other
entity.
I.R.C. § 168(h)(4)(C)(ii) —
For purposes of clause (i), entities treated as related
under subparagraph (A) or (B) shall be treated as 1 entity.
I.R.C. § 168(h)(4)(D) —
An entity is related to another entity
with respect to a transaction if such transaction is part of an attempt
by such entities to avoid the application of this subsection.
I.R.C. § 168(h)(5) Tax-Exempt Use Of Property Leased To Partnerships, Etc., Determined
At Partner Level —
For purposes of this subsection—
I.R.C. § 168(h)(5)(A) In General —
In the case of any property which is leased to a partnership,
the determination of whether any portion of such property is tax-exempt
use property shall be made by treating each tax-exempt entity partner's
proportionate share (determined under paragraph (6)(C)) of such property as being
leased to such partner.
I.R.C. § 168(h)(5)(B) Other Pass-Thru Entities; Tiered Entities —
Rules similar to the rules of subparagraph (A) shall also apply in the case
of any pass-thru entity other than a partnership and in the case of
tiered partnerships and other entities.
I.R.C. § 168(h)(5)(C) Presumption With Respect To Foreign Entities —
Unless it is otherwise established to the satisfaction
of the Secretary, it shall be presumed that the partners of a foreign
partnership (and the beneficiaries of any other foreign pass-thru
entity) are persons who are not United States persons.
I.R.C. § 168(h)(6) Treatment Of Property Owned By Partnerships, Etc.
I.R.C. § 168(h)(6)(A) In General —
For purposes of this subsection, if—
I.R.C. § 168(h)(6)(A)(i) —
any property which (but for this subparagraph)
is not tax-exempt use property is owned by a partnership which has
both a tax-exempt entity and a person who is not a tax-exempt entity
as partners, and
I.R.C. § 168(h)(6)(A)(ii) —
any allocation to the tax-exempt entity
of partnership items is not a qualified allocation, an amount equal
to such tax-exempt entity's proportionate share of such property shall
(except as provided in paragraph (1)(D))
be treated as tax-exempt use property.
I.R.C. § 168(h)(6)(B) Qualified Allocation —
For purposes of subparagraph (A), the term “qualified
allocation” means any allocation to a tax-exempt entity which—
I.R.C. § 168(h)(6)(B)(i) —
is consistent with such entity's being
allocated the same distributive share of each item of income, gain,
loss, deduction, credit, and basis and such share remains the same
during the entire period the entity is a partner in the partnership,
and
I.R.C. § 168(h)(6)(B)(ii) —
has substantial economic effect within
the meaning of section 704(b)(2).
For purposes of this subparagraph,
items allocated under section 704(c) shall
not be taken into account.
I.R.C. § 168(h)(6)(C) Determination Of Proportionate Share
I.R.C. § 168(h)(6)(C)(i) In General —
For purposes of subparagraph (A), a tax-exempt entity's proportionate
share of any property owned by a partnership shall be determined on
the basis of such entity's share of partnership items of income or
gain (excluding gain allocated under section 704(c)), whichever results in
the largest proportionate share.
I.R.C. § 168(h)(6)(C)(ii) Determination Where Allocations Vary —
For purposes of clause (i), if a tax-exempt entity's
share of partnership items of income or gain (excluding gain allocated
under section 704(c))
may vary during the period such entity is a partner in the partnership,
such share shall be the highest share such entity may receive.
I.R.C. § 168(h)(6)(D) Determination Of Whether Property Used In Unrelated Trade Or
Business —
For purposes of this subsection, in the case of any
property which is owned by a partnership which has both a tax-exempt
entity and a person who is not a tax-exempt entity as partners, the
determination of whether such property is used in an unrelated trade
or business of such an entity shall be made without regard to section 514.
I.R.C. § 168(h)(6)(E) Other Pass-Thru Entities; Tiered Entities —
Rules similar to the rules of subparagraphs (A), (B), (C), and (D) shall also apply in the case
of any pass-thru entity other than a partnership and in the case of
tiered partnerships and other entities.
I.R.C. § 168(h)(6)(F) Treatment Of Certain Taxable Entities
I.R.C. § 168(h)(6)(F)(i) In General —
For purposes of this paragraph and paragraph (5), except as otherwise provided
in this subparagraph, any tax-exempt controlled entity shall be treated
as a tax-exempt entity.
I.R.C. § 168(h)(6)(F)(ii) Election —
If a tax-exempt controlled entity makes an election
under this clause—
I.R.C. § 168(h)(6)(F)(ii)(I) —
such entity shall not be treated as
a tax-exempt entity for purposes of this paragraph and paragraph (5), and
I.R.C. § 168(h)(6)(F)(ii)(II) —
any gain recognized by a tax-exempt
entity on any disposition of an interest in such entity (and any dividend
or interest received or accrued by a tax-exempt entity from such tax-exempt
controlled entity) shall be treated as unrelated business taxable
income for purposes of section 511.
Any such election shall be irrevocable
and shall bind all tax-exempt entities holding interests in such tax-exempt
controlled entity. For purposes of subclause (II), there shall only
be taken into account dividends which are properly allocable to income
of the tax-exempt controlled entity which was not subject to tax under
this chapter.
I.R.C. § 168(h)(6)(F)(iii) Tax-Exempt Controlled Entity
I.R.C. § 168(h)(6)(F)(iii)(I) In General —
The term “tax-exempt controlled entity”
means any corporation (which is not a tax-exempt entity determined
without regard to this subparagraph and paragraph (2)(E)) if 50 percent or more
(in value) of the stock in such corporation is held by 1 or more tax-exempt
entities (other than a foreign person or entity).
I.R.C. § 168(h)(6)(F)(iii)(II) Only 5-Percent Shareholders Taken Into Account In Case Of Publicly
Traded Stock —
For purposes of subclause (I), in the case of a
corporation the stock of which is publicly traded on an established
securities market, stock held by a tax-exempt entity shall not be
taken into account unless such entity holds at least 5 percent (in
value) of the stock in such corporation. For purposes of this subclause,
related entities (within the meaning of paragraph (4)) shall be treated as 1 entity.
I.R.C. § 168(h)(6)(F)(iii)(III) Section 318 To Apply —
For purposes of this clause, a tax-exempt entity shall
be treated as holding stock which it holds through application of
section 318 (determined
without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof).
I.R.C. § 168(h)(6)(G) Regulations —
For purposes of determining whether there is a qualified
allocation under subparagraph (B),
the regulations prescribed under paragraph (8) for purposes of this paragraph—
I.R.C. § 168(h)(6)(G)(i) —
shall set forth the proper treatment
for partnership guaranteed payments, and
I.R.C. § 168(h)(6)(G)(ii) —
may provide for the exclusion or segregation
of items.
I.R.C. § 168(h)(7) Lease —
For purposes of this subsection, the term “lease”
includes any grant of a right to use property.
I.R.C. § 168(h)(8) Regulations —
The Secretary shall prescribe such regulations as may
be necessary or appropriate to carry out the purposes of this subsection.
I.R.C. § 168(i) Definitions And Special Rules —
For purposes of this section—
I.R.C. § 168(i)(1) Class Life —
Except as provided in this section, the term “class
life” means the class life (if any) which would be applicable
with respect to any property as of January 1, 1986, under subsection (m) of section 167 (determined without regard
to paragraph (4) and as
if the taxpayer had made an election under such subsection). The Secretary,
through an office established in the Treasury, shall monitor and analyze
actual experience with respect to all depreciable assets. The reference
in this paragraph to subsection (m) of section 167 shall be treated as a reference
to such subsection as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990.
I.R.C. § 168(i)(2) Qualified Technological Equipment
I.R.C. § 168(i)(2)(A) In General —
The term “qualified technological equipment”
means—
I.R.C. § 168(i)(2)(A)(i) —
any computer or peripheral equipment,
I.R.C. § 168(i)(2)(A)(ii) —
any high technology telephone station
equipment installed on the customer's premises, and
I.R.C. § 168(i)(2)(A)(iii) —
any high technology medical equipment.
I.R.C. § 168(i)(2)(B) Computer Or Peripheral Equipment Defined —
For purposes of this paragraph—
I.R.C. § 168(i)(2)(B)(i) In General —
The term “computer or peripheral equipment”
means—
I.R.C. § 168(i)(2)(B)(i)(I) —
any computer, and
I.R.C. § 168(i)(2)(B)(i)(II) —
any related peripheral equipment.
I.R.C. § 168(i)(2)(B)(ii) Computer —
The term “computer” means a programmable
electronically activated device which—
I.R.C. § 168(i)(2)(B)(ii)(I) —
is capable of accepting information,
applying prescribed processes to the information, and supplying the
results of these processes with or without human intervention, and
I.R.C. § 168(i)(2)(B)(ii)(II) —
consists of a central processing unit
containing extensive storage, logic, arithmetic, and control capabilities.
I.R.C. § 168(i)(2)(B)(iii) Related Peripheral Equipment —
The term “related peripheral equipment”
means any auxiliary machine (whether on-line or off-line) which is
designed to be placed under the control of the central processing
unit of a computer.
I.R.C. § 168(i)(2)(B)(iv) Exceptions —
The term “computer or peripheral equipment”
shall not include—
I.R.C. § 168(i)(2)(B)(iv)(I) —
any equipment which is an integral part
of other property which is not a computer,
I.R.C. § 168(i)(2)(B)(iv)(II) —
typewriters, calculators, adding and
accounting machines, copiers, duplicating equipment, and similar equipment,
and
I.R.C. § 168(i)(2)(B)(iv)(III) —
equipment of a kind used primarily
for amusement or entertainment of the user.
I.R.C. § 168(i)(2)(C) High Technology Medical Equipment —
For purposes of this paragraph, the term “high
technology medical equipment” means any electronic, electromechanical,
or computer-based high technology equipment used in the screening,
monitoring, observation, diagnosis, or treatment of patients in a
laboratory, medical, or hospital environment.
I.R.C. § 168(i)(3) Lease Term
I.R.C. § 168(i)(3)(A) In General —
In determining a lease term—
I.R.C. § 168(i)(3)(A)(i) —
there shall be taken into account options
to renew,
I.R.C. § 168(i)(3)(A)(ii) —
the term of a lease shall include the
term of any service contract or similar arrangement (whether or not
treated as a lease under section 7701(e))—
I.R.C. § 168(i)(3)(A)(ii)(I) —
which is part of the same transaction
(or series of related transactions) which includes the lease, and
I.R.C. § 168(i)(3)(A)(ii)(II) —
which is with respect to the property
subject to the lease or substantially similar property, and
I.R.C. § 168(i)(3)(A)(iii) —
2 or more successive leases which
are part of the same transaction (or a series of related transactions)
with respect to the same or substantially similar property shall be
treated as 1 lease.
I.R.C. § 168(i)(3)(B) Special Rule For Fair Rental Options On Nonresidential Real
Property Or Residential Rental Property —
For purposes of clause (i) of subparagraph (A), in the case of nonresidential
real property or residential rental property, there shall not be taken
into account any option to renew at fair market value, determined
at the time of renewal.
I.R.C. § 168(i)(4) General Asset Accounts —
Under regulations, a taxpayer may maintain 1 or more
general asset accounts for any property to which this section applies.
Except as provided in regulations, all proceeds realized on any disposition
of property in a general asset account shall be included in income
as ordinary income.
I.R.C. § 168(i)(5) Changes In Use —
The Secretary shall, by regulations, provide for the
method of determining the deduction allowable under section 167(a) with respect to any tangible
property for any taxable year (and the succeeding taxable years) during
which such property changes status under this section but continues
to be held by the same person.
I.R.C. § 168(i)(6) Treatments Of Additions Or Improvements To Property —
In the case of any addition to (or improvement of) any
property—
I.R.C. § 168(i)(6)(A) —
any deduction under subsection (a) for such addition or improvement
shall be computed in the same manner as the deduction for such property
would be computed if such property had been placed in service at the
same time as such addition or improvement, and
I.R.C. § 168(i)(6)(B) —
the applicable recovery period for such
addition or improvement shall begin on the later of—
I.R.C. § 168(i)(6)(B)(i) —
the date on which such addition (or
improvement) is placed in service, or
I.R.C. § 168(i)(6)(B)(ii) —
the date on which the property with
respect to which such addition (or improvement) was made is placed
in service.
I.R.C. § 168(i)(7) Treatment Of Certain Transferees
I.R.C. § 168(i)(7)(A) In General —
In the case of any property transferred in a transaction
described in subparagraph (B),
the transferee shall be treated as the transferor for purposes of
computing the depreciation deduction determined under this section
with respect to so much of the basis in the hands of the transferee
as does not exceed the adjusted basis in the hands of the transferor.
In any case where this section as in effect before the amendments
made by section 201 of
the Tax Reform Act of 1986 applied to the property in the hands of
the transferor, the reference in the preceding sentence to this section
shall be treated as a reference to this section as so in effect.
I.R.C. § 168(i)(7)(B) Transactions Covered —
The transactions described in this
subparagraph are—
I.R.C. § 168(i)(7)(B)(i) —
any transaction described in section 332, 351, 361, 721,
or 731, and
I.R.C. § 168(i)(7)(B)(ii) —
any transaction between members of
the same affiliated group during any taxable year for which a consolidated
return is made by such group.
I.R.C. § 168(i)(7)(C) Property Reacquired By The Taxpayer —
Under regulations, property which is disposed of and
then reacquired by the taxpayer shall be treated for purposes of computing
the deduction allowable under subsection (a) as
if such property had not been disposed of.
I.R.C. § 168(i)(7)(D) —
[Repealed]
I.R.C. § 168(i)(8) Treatment Of Leasehold Improvements
I.R.C. § 168(i)(8)(A) In General —
In the case of any building erected (or improvements
made) on leased property, if such building or improvement is property
to which this section applies, the depreciation deduction shall be
determined under the provisions of this section.
I.R.C. § 168(i)(8)(B) Treatment Of Lessor Improvements Which Are Abandoned At Termination
Of Lease —
An improvement—
I.R.C. § 168(i)(8)(B)(i) —
which is made by the lessor of leased
property for the lessee of such property, and
I.R.C. § 168(i)(8)(B)(ii) —
which is irrevocably disposed of or
abandoned by the lessor at the termination of the lease by such lessee,
shall be treated
for purposes of determining gain or loss under this title as disposed
of by the lessor when so disposed of or abandoned.
I.R.C. § 168(i)(8)(C) Cross Reference —
For treatment of qualified long-term real property constructed
or improved in connection with cash or rent reduction from lessor
to lessee, see section 110(b).
I.R.C. § 168(i)(9) Normalization Rules
I.R.C. § 168(i)(9)(A) In General —
In order to use a normalization method of accounting
with respect to any public utility property for purposes of subsection (f)(2)—
I.R.C. § 168(i)(9)(A)(i) —
the taxpayer must, in computing its
tax expense for purposes of establishing its cost of service for ratemaking
purposes and reflecting operating results in its regulated books of
account, use a method of depreciation with respect to such property
that is the same as, and a depreciation period for such property that
is no shorter than, the method and period used to compute its depreciation
expense for such purposes; and
I.R.C. § 168(i)(9)(A)(ii) —
if the amount allowable as a deduction
under this section with respect to such property (respecting all elections
made by the taxpayer under this section) differs from the amount that
would be allowable as a deduction under section 167 using the method (including
the period, first and last year convention, and salvage value) used
to compute regulated tax expense under clause (i), the taxpayer must make
adjustments to a reserve to reflect the deferral of taxes resulting
from such difference.
I.R.C. § 168(i)(9)(B) Use Of Inconsistent Estimates And Projections, Etc.
I.R.C. § 168(i)(9)(B)(i) In General —
One way in which the requirements of subparagraph (A) are not met is if the taxpayer,
for ratemaking purposes, uses a procedure or adjustment which is inconsistent
with the requirements of subparagraph (A).
I.R.C. § 168(i)(9)(B)(ii) Use Of Inconsistent Estimates And Projections —
The procedures and adjustments which are to be treated
as inconsistent for purposes of clause (i) shall include any procedure
or adjustment for ratemaking purposes which uses an estimate or projection
of the taxpayer's tax expense, depreciation expense, or reserve for
deferred taxes under subparagraph (A)(ii) unless such estimate
or projection is also used, for ratemaking purposes, with respect
to the other 2 such items and with respect to the rate base.
I.R.C. § 168(i)(9)(B)(iii) Regulatory Authority —
The Secretary may by regulations prescribe procedures
and adjustments (in addition to those specified in clause (ii)) which are to be treated
as inconsistent for purposes of clause (i).
I.R.C. § 168(i)(9)(C) Public Utility Property Which Does Not Meet Normalization Rules —
In the case of any public utility property to which
this section does not apply by reason of subsection (f)(2), the allowance for depreciation
under section 167(a) shall
be an amount computed using the method and period referred to in subparagraph (A)(i).
I.R.C. § 168(i)(10) Public Utility Property —
The term “public utility property” means
property used predominantly in the trade or business of the furnishing
or sale of—
I.R.C. § 168(i)(10)(A) —
electrical energy, water, or sewage
disposal services,
I.R.C. § 168(i)(10)(B) —
gas or steam through a local distribution
system,
I.R.C. § 168(i)(10)(C) —
telephone services, or other communication
services if furnished or sold by the Communications Satellite Corporation
for purposes authorized by the Communications Satellite Act of 1962
(47 U.S.C. 701), or
I.R.C. § 168(i)(10)(D) —
transportation of gas or steam by pipeline,
if the rates for such furnishing
or sale, as the case may be, have been established or approved by
a State or political subdivision thereof, by any agency or instrumentality
of the United States, or by a public service or public utility commission
or other similar body of any State or political subdivision thereof.
I.R.C. § 168(i)(11) Research And Experimentation —
The term “research and experimentation”
has the same meaning as the term research and experimental has under
section 174.
I.R.C. § 168(i)(12) Section 1245 And 1250 Property —
The terms “section 1245 property”
and “section 1250 property”
have the meanings given such terms by sections 1245(a)(3) and 1250(c), respectively.
I.R.C. § 168(i)(13) Single Purpose Agricultural Or Horticultural Structure
I.R.C. § 168(i)(13)(A) In General —
The term ”single purpose agricultural or horticultural
structure” means—
I.R.C. § 168(i)(13)(A)(i) —
a single purpose livestock structure,
and
I.R.C. § 168(i)(13)(A)(ii) —
a single purpose horticultural structure.
I.R.C. § 168(i)(13)(B) Definitions —
For purposes of this paragraph—
I.R.C. § 168(i)(13)(B)(i) Single Purpose Livestock Structure —
The term “single purpose livestock structure”
means any enclosure or structure specifically designed, constructed,
and used—
I.R.C. § 168(i)(13)(B)(i)(I) —
for housing, raising, and feeding a
particular type of livestock and their produce, and
I.R.C. § 168(i)(13)(B)(i)(II) —
for housing the equipment (including
any replacements) necessary for the housing, raising, and feeding
referred to in subclause (I).
I.R.C. § 168(i)(13)(B)(ii) Single Purpose Horticultural Structure —
The term “single purpose horticultural structure”
means—
I.R.C. § 168(i)(13)(B)(ii)(I) —
a greenhouse specifically designed,
constructed, and used for the commercial production of plants, and
I.R.C. § 168(i)(13)(B)(ii)(II) —
a structure specifically designed,
constructed, and used for the commercial production of mushrooms.
I.R.C. § 168(i)(13)(B)(iii) Structures Which Include Work Space —
An enclosure or structure which provides work space
shall be treated as a single purpose agricultural or horticultural
structure only if such work space is solely for—
I.R.C. § 168(i)(13)(B)(iii)(I) —
the stocking, caring for, or collecting
of livestock or plants (as the case may be) or their produce,
I.R.C. § 168(i)(13)(B)(iii)(II) —
the maintenance of the enclosure or
structure, and
I.R.C. § 168(i)(13)(B)(iii)(III) —
the maintenance or replacement of
the equipment or stock enclosed or housed therein.
I.R.C. § 168(i)(14) Qualified Rent-To-Own Property
I.R.C. § 168(i)(14)(A) In General —
The term “qualified rent-to-own property”
means property held by a rent-to-own dealer for purposes of being
subject to a rent-to-own contract.
I.R.C. § 168(i)(14)(B) Rent-To-Own Dealer —
The term “rent-to-own dealer” means a person
that, in the ordinary course of business, regularly enters into rent-to-own
contracts with customers for the use of consumer property, if a substantial
portion of those contracts terminate and the property is returned
to such person before the receipt of all payments required to transfer
ownership of the property from such person to the customer.
I.R.C. § 168(i)(14)(C) Consumer Property —
The term “consumer property” means tangible
personal property of a type generally used within the home for personal
use.
I.R.C. § 168(i)(14)(D) Rent-To-Own Contract —
The term “rent-to-own contract” means any
lease for the use of consumer property between a rent-to-own dealer
and a customer who is an individual which—
I.R.C. § 168(i)(14)(D)(i) —
is titled “Rent-to-Own Agreement”
or “Lease Agreement with Ownership Option,” or uses other
similar language,
I.R.C. § 168(i)(14)(D)(ii) —
provides for level (or decreasing where
no payment is less than 40 percent of the largest payment), regular
periodic payments (for a payment period which is a week or month),
I.R.C. § 168(i)(14)(D)(iii) —
provides that legal title to such
property remains with the rent-to-own dealer until the customer makes
all the payments described in clause (ii) or early purchase payments
required under the contract to acquire legal title to the item of
property,
I.R.C. § 168(i)(14)(D)(iv) —
provides a beginning date and a maximum
period of time for which the contract may be in effect that does not
exceed 156 weeks or 36 months from such beginning date (including
renewals or options to extend),
I.R.C. § 168(i)(14)(D)(v) —
provides for payments within the 156-week
or 36-month period that, in the aggregate, generally exceed the normal
retail price of the consumer property plus interest,
I.R.C. § 168(i)(14)(D)(vi) —
provides for payments under the contract
that, in the aggregate, do not exceed $10,000 per item of consumer
property,
I.R.C. § 168(i)(14)(D)(vii) —
provides that the customer does not
have any legal obligation to make all the payments referred to in
clause (ii) set
forth under the contract, and that at the end of each payment period
the customer may either continue to use the consumer property by making
the payment for the next payment period or return such property to
the rent-to-own dealer in good working order, in which case the customer
does not incur any further obligations under the contract and is not
entitled to a return of any payments previously made under the contract,
and
I.R.C. § 168(i)(14)(D)(viii) —
provides that the customer has no
right to sell, sublease, mortgage, pawn, pledge, encumber, or otherwise
dispose of the consumer property until all the payments stated in
the contract have been made.
I.R.C. § 168(i)(15) Motorsports Entertainment Complex
I.R.C. § 168(i)(15)(A) In General —
The term “motorsports entertainment complex”
means a racing track facility which—
I.R.C. § 168(i)(15)(A)(i) —
is permanently situated on land, and
I.R.C. § 168(i)(15)(A)(ii) —
during the 36-month period following
the first day of the month in which the asset is placed in service,
hosts 1 or more racing events for automobiles (of any type), trucks,
or motorcycles which are open to the public for the price of admission.
I.R.C. § 168(i)(15)(B) Ancillary And Support Facilities —
Such term shall include, if owned by the taxpayer who
owns the complex and provided for the benefit of patrons of the complex—
I.R.C. § 168(i)(15)(B)(i) —
ancillary facilities and land improvements
in support of the complex's activities (including parking lots, sidewalks,
waterways, bridges, fences, and landscaping),
I.R.C. § 168(i)(15)(B)(ii) —
support facilities (including food
and beverage retailing, souvenir vending, and other nonlodging accommodations),
and
I.R.C. § 168(i)(15)(B)(iii) —
appurtenances associated with such
facilities and related attractions and amusements (including ticket
booths, race track surfaces, suites and hospitality facilities, grandstands
and viewing structures, props, walls, facilities that support the
delivery of entertainment services, other special purpose structures,
facades, shop interiors, and buildings).
I.R.C. § 168(i)(15)(C) Exception —
Such term shall not include any transportation equipment,
administrative services assets, warehouses, administrative buildings,
hotels, or motels.
I.R.C. § 168(i)(15)(D) Termination —
Such term shall not include any property placed in service
after December 31, 2025.
I.R.C. § 168(i)(16) Alaska Natural Gas Pipeline —
The term “Alaska natural gas pipeline” means
the natural gas pipeline system located in the State of Alaska which—
I.R.C. § 168(i)(16)(A) —
has a capacity of more than 500,000,000,000
Btu of natural gas per day, and
I.R.C. § 168(i)(16)(B) —
is—
I.R.C. § 168(i)(16)(B)(i) —
placed in service after December 31,
2013, or
I.R.C. § 168(i)(16)(B)(ii) —
treated as placed in service on January
1, 2014, if the taxpayer who places such system in service before
January 1, 2014, elects such treatment.
Such term includes
the pipe, trunk lines, related equipment, and appurtenances used to
carry natural gas, but does not include any gas processing plant.
I.R.C. § 168(i)(17) Natural Gas Gathering Line —
The term “natural gas gathering line” means—
I.R.C. § 168(i)(17)(A) —
the pipe, equipment, and appurtenances
determined to be a gathering line by the Federal Energy Regulatory
Commission, and
I.R.C. § 168(i)(17)(B) —
the pipe, equipment, and appurtenances
used to deliver natural gas from the wellhead or a commonpoint to
the point at which such gas first reaches—
I.R.C. § 168(i)(17)(B)(i) —
a gas processing plant,
I.R.C. § 168(i)(17)(B)(ii) —
an interconnection with a transmission
pipeline for which a certificate as an interstate transmission pipeline
has been issued by the Federal Energy Regulatory Commission,
I.R.C. § 168(i)(17)(B)(iii) —
an interconnection with an intrastate
transmission pipeline, or
I.R.C. § 168(i)(17)(B)(iv) —
a direct interconnection with a local
distribution company, a gas storage facility, or an industrial consumer.
I.R.C. § 168(i)(18) Qualified Smart Electric Meters
I.R.C. § 168(i)(18)(A) In General —
The term “qualified smart electric meter”
means any smart electric meter which—
I.R.C. § 168(i)(18)(A)(i) —
is placed in service by a taxpayer who
is a supplier of electric energy or a provider of electric energy
services, and
I.R.C. § 168(i)(18)(A)(ii) —
does not have a class life (determined
without regard to subsection (e))
of less than 16 years.
I.R.C. § 168(i)(18)(B) Smart Electric Meter —
For purposes of subparagraph (A), the term “smart electric
meter” means any time-based meter and related communication
equipment which is capable of being used by the taxpayer as part of
a system that—
I.R.C. § 168(i)(18)(B)(i) —
measures and records electricity usage
data on a time-differentiated basis in at least 24 separate time segments
per day,
I.R.C. § 168(i)(18)(B)(ii) —
provides for the exchange of information
between supplier or provider and the customer's electric meter in
support of time-based rates or other forms of demand response,
I.R.C. § 168(i)(18)(B)(iii) —
provides data to such supplier or provider
so that the supplier or provider can provide energy usage information
to customers electronically, and
I.R.C. § 168(i)(18)(B)(iv) —
provides net metering.
I.R.C. § 168(i)(19) Qualified Smart Electric Grid Systems
I.R.C. § 168(i)(19)(A) In General —
The term “qualified smart electric grid system”
means any smart grid property which—
I.R.C. § 168(i)(19)(A)(i) —
is used as part of a system for electric
distribution grid communications, monitoring, and management placed
in service by a taxpayer who is a supplier of electric energy or a
provider of electric energy services, and
I.R.C. § 168(i)(19)(A)(ii) —
does not have a class life (determined
without regard to subsection (e))
of less than 16 years.
I.R.C. § 168(i)(19)(B) Smart Grid Property —
For the purposes of subparagraph (A), the term “smart grid
property” means electronics and related equipment that is capable
of—
I.R.C. § 168(i)(19)(B)(i) —
sensing, collecting, and monitoring data
of or from all portions of a utility's electric distribution grid,
I.R.C. § 168(i)(19)(B)(ii) —
providing real-time, two-way communications
to monitor or manage such grid, and
I.R.C. § 168(i)(19)(B)(iii) —
providing real time analysis of and
event prediction based upon collected data that can be used to improve
electric distribution system reliability, quality, and performance.
I.R.C. § 168(j) Property On Indian Reservations
I.R.C. § 168(j)(1) In General —
For purposes of subsection (a),
the applicable recovery period for qualified Indian reservation property
shall be determined in accordance with the table contained in paragraph (2) in lieu of the table contained
in subsection (c).
I.R.C. § 168(j)(2) Applicable Recovery Period For Indian Reservation Property —
For purposes of paragraph (1)—
In the case of: | The applicable recovery period is: |
3-year property | 2 years |
5-year property | 3 years |
7-year property | 4 years |
10-year property | 6 years |
15-year property | 9 years |
20-year property | 12 years |
Nonresidential real property | 22 years. |
In the case of: | The applicable recovery period is: |
3-year property | 2 years |
5-year property | 3 years |
7-year property | 4 years |
10-year property | 6 years |
15-year property | 9 years |
20-year property | 12 years |
Nonresidential real property | 22 years. |
I.R.C. § 168(j)(3) Deduction Allowed In Computing Minimum Tax —
For purposes of determining alternative minimum taxable
income under section 56,
the deduction under subsection (a) for qualified Indian reservation
property shall be determined under this section without regard to
any adjustment under section 55.
I.R.C. § 168(j)(4) Qualified Indian Reservation Property Defined —
For purposes of this subsection—
I.R.C. § 168(j)(4)(A) In General —
The term “qualified Indian reservation property”
means property which is property described in the table in paragraph
(2) and which is—
I.R.C. § 168(j)(4)(A)(i) —
used by the taxpayer predominantly in
the active conduct of a trade or business within an Indian reservation,
I.R.C. § 168(j)(4)(A)(ii) —
not used or located outside the Indian
reservation on a regular basis,
I.R.C. § 168(j)(4)(A)(iii) —
not acquired (directly or indirectly)
by the taxpayer from a person who is related to the taxpayer (within
the meaning of section 465(b)(3)(C)),
and
I.R.C. § 168(j)(4)(A)(iv) —
not property (or any portion thereof)
placed in service for purposes of conducting or housing class I, II,
or III gaming (as defined in section 4 of
the Indian Regulatory Act (25 U.S.C. 2703)).
I.R.C. § 168(j)(4)(B) Exception For Alternative Depreciation Property —
The term “qualified Indian reservation property”
does not include any property to which the alternative depreciation
system under subsection (g) applies,
determined—
I.R.C. § 168(j)(4)(B)(i) —
without regard to subsection (g)(7) (relating to election to
use alternative depreciation system), and
I.R.C. § 168(j)(4)(B)(ii) —
after the application of section 280F(b) (relating to listed
property with limited business use).
I.R.C. § 168(j)(4)(C) Special Rule For Reservation Infrastructure Investment
I.R.C. § 168(j)(4)(C)(i) In General —
Subparagraph (A)(ii) shall
not apply to qualified infrastructure property located outside of
the Indian reservation if the purpose of such property is to connect
with qualified infrastructure property located within the Indian reservation.
I.R.C. § 168(j)(4)(C)(ii) Qualified Infrastructure Property —
For purposes of this subparagraph, the term “qualified
infrastructure property” means qualified Indian reservation
property (determined without regard to subparagraph (A)(ii)) which—
I.R.C. § 168(j)(4)(C)(ii)(I) —
benefits the tribal infrastructure,
I.R.C. § 168(j)(4)(C)(ii)(II) —
is available to the general public,
and
I.R.C. § 168(j)(4)(C)(ii)(III) —
is placed in service in connection
with the taxpayer's active conduct of a trade or business within an
Indian reservation.
Such term includes, but is not limited
to, roads, power lines, water systems, railroad spurs, and communications
facilities.
I.R.C. § 168(j)(5) Real Estate Rentals —
For purposes of this subsection, the rental to others
of real property located within an Indian reservation shall be treated
as the active conduct of a trade or business within an Indian reservation.
I.R.C. § 168(j)(6) Indian Reservation Defined —
For purposes of this subsection, the term “Indian
reservation” means a reservation, as defined in—
I.R.C. § 168(j)(6)(A) —
section 3(d) of the Indian Financing
Act of 1974 (25 U.S.C. 1452(d)),
or
I.R.C. § 168(j)(6)(B) —
section 4(10) of the Indian Child Welfare
Act of 1978 (25 U.S.C. 1903(10)).
For purposes of the preceding sentence,
such section 3(d) shall be applied by treating the term “former
Indian reservations in Oklahoma” as including only lands which
are within the jurisdictional area of an Oklahoma Indian tribe (as
determined by the Secretary of the Interior) and are recognized by
such Secretary as eligible for trust land status under 25 CFR Part 151 (as in effect on the date
of the enactment of this sentence).
I.R.C. § 168(j)(7) Coordination With Nonrevenue Laws —
Any reference in this subsection to a provision not
contained in this title shall be treated for purposes of this subsection
as a reference to such provision as in effect on the date of the enactment
of this paragraph.
I.R.C. § 168(j)(8) Election Out —
If a taxpayer makes an election under this paragraph
with respect to any class of property for any taxable year, paragraph
(1) shall not apply to all property in such class placed in service
during such taxable year. Such election, once made, shall be irrevocable.
I.R.C. § 168(j)(9) Termination —
This subsection shall not apply to property placed in
service after December 31, 2021.
I.R.C. § 168(k) Special Allowance For Certain Property
I.R.C. § 168(k)(1) Additional Allowance —
In the case of any qualified property—
I.R.C. § 168(k)(1)(A) —
the depreciation deduction provided
by section 167(a) for
the taxable year in which such property is placed in service shall
include an allowance equal to the applicable percentage of the adjusted
basis of the qualified property, and
I.R.C. § 168(k)(1)(B) —
the adjusted basis of the qualified
property shall be reduced by the amount of such deduction before computing
the amount otherwise allowable as a depreciation deduction under this
chapter for such taxable year and any subsequent taxable year.
I.R.C. § 168(k)(2) Qualified Property —
For purposes of this subsection—
I.R.C. § 168(k)(2)(A) In General —
The term “qualified property”
means property—
I.R.C. § 168(k)(2)(A)(i)
I.R.C. § 168(k)(2)(A)(i)(I) —
to which this section applies which
has a recovery period of 20 years or less,
I.R.C. § 168(k)(2)(A)(i)(II) —
which is computer software (as defined
in section 167(f)(1)(B))
for which a deduction is allowable under section 167(a) without regard to this
subsection,
I.R.C. § 168(k)(2)(A)(i)(III) —
which is water utility property, or
I.R.C. § 168(k)(2)(A)(i)(IV) —
which is a qualified film or television
production (as defined in subsection (d) of section 181) for which a deduction would
have been allowable under section 181 without
regard to subsections (a)(2) and (g) of such section or this subsection,
or
I.R.C. § 168(k)(2)(A)(i)(V) —
which is a qualified live theatrical
production (as defined in subsection (e) of section 181) for which a deduction would
have been allowable under section 181 without
regard to subsections (a)(2) and (g) of such section or this subsection,
I.R.C. § 168(k)(2)(A)(ii) —
the original use of which begins with
the taxpayer or the acquisition of which by the taxpayer meets the
requirements of clause (ii) of subparagraph (E), and
I.R.C. § 168(k)(2)(A)(iii) —
which is placed in service by the
taxpayer before January 1, 2027.
I.R.C. § 168(k)(2)(B) Certain Property Having Longer Production Periods Treated As
Qualified Property
I.R.C. § 168(k)(2)(B)(i) In General —
The term “qualified property” includes any
property if such property—
I.R.C. § 168(k)(2)(B)(i)(I) —
meets the requirements of clauses (i) and (ii) of subparagraph (A),
I.R.C. § 168(k)(2)(B)(i)(II) —
is placed in service by the taxpayer
before January 1, 2028,
I.R.C. § 168(k)(2)(B)(i)(III) —
is acquired by the taxpayer (or acquired
pursuant to a written binding contract entered into) before January
1, 2027,
I.R.C. § 168(k)(2)(B)(i)(IV) —
has a recovery period of at least 10
years or is transportation property,
I.R.C. § 168(k)(2)(B)(i)(V) —
is subject to section 263A, and
I.R.C. § 168(k)(2)(B)(i)(VI) —
meets the requirements of clause (iii) of section 263A(f)(1)(B) (determined as
if such clause also applies to property which has a long useful life
(within the meaning of section 263A(f))).
I.R.C. § 168(k)(2)(B)(ii) Only Pre-January 1, 2027 Basis Eligible For Additional Allowance —
In the case of property which is qualified property
solely by reason of clause (i),
paragraph (1) shall apply
only to the extent of the adjusted basis thereof attributable to manufacture,
construction, or production before January 1, 2027.
I.R.C. § 168(k)(2)(B)(iii) Transportation Property —
For purposes of this subparagraph, the term “transportation
property” means tangible personal property used in the trade
or business of transporting persons or property.
I.R.C. § 168(k)(2)(B)(iv) Application Of Subparagraph —
This subparagraph shall not apply to any property which
is described in subparagraph (C).
I.R.C. § 168(k)(2)(C) Certain Aircraft —
The term “qualified property” includes property—
I.R.C. § 168(k)(2)(C)(i) —
which meets the requirements of subparagraph (A)(ii) and subclauses (II) and (III) of subparagraph (B)(i),
I.R.C. § 168(k)(2)(C)(ii) —
which is an aircraft which is not a
transportation property (as defined in subparagraph (B)(iii)) other than for
agricultural or firefighting purposes,
I.R.C. § 168(k)(2)(C)(iii) —
which is purchased and on which such
purchaser, at the time of the contract for purchase, has made a nonrefundable
deposit of the lesser of—
I.R.C. § 168(k)(2)(C)(iii)(I) —
10 percent of the cost, or
I.R.C. § 168(k)(2)(C)(iii)(II) —
$100,000, and
I.R.C. § 168(k)(2)(C)(iv) —
which has—
I.R.C. § 168(k)(2)(C)(iv)(I) —
an estimated production period exceeding
4 months, and
I.R.C. § 168(k)(2)(C)(iv)(II) —
a cost exceeding $200,000.
I.R.C. § 168(k)(2)(D) Exception For Alternative Depreciation Property —
The term “qualified property” shall not
include any property to which the alternative depreciation system
under subsection (g) applies,
determined—
I.R.C. § 168(k)(2)(D)(i) —
without regard to paragraph (7) of subsection (g) (relating to election to have system
apply), and
I.R.C. § 168(k)(2)(D)(ii) —
after application of section 280F(b) (relating to listed
property with limited business use).
I.R.C. § 168(k)(2)(E) Special Rules —
I.R.C. § 168(k)(2)(E)(i) Self-Constructed Property —
In the case of a taxpayer manufacturing, constructing,
or producing property for the taxpayer's own use, the requirements
of subclause (III) of
subparagraph (B)(ii) shall
be treated as met if the taxpayer begins manufacturing, constructing,
or producing the property before January 1, 2027.
I.R.C. § 168(k)(2)(E)(ii) Acquisition Requirements —
An acquisition of property meets the requirements of
this clause if—
I.R.C. § 168(k)(2)(E)(ii)(I) —
such property was not used by the taxpayer
at any time prior to such acquisition, and
I.R.C. § 168(k)(2)(E)(ii)(II) —
the acquisition of such property meets
the requirements of paragraphs (2)(A), (2)(B), (2)(C), and (3) of
section 179(d).
I.R.C. § 168(k)(2)(E)(iii) Syndication —
For purposes of subparagraph (A)(ii), if—
I.R.C. § 168(k)(2)(E)(iii)(I) —
property is used by a lessor of such
property and such use is the lessor's first use of such property,
I.R.C. § 168(k)(2)(E)(iii)(II) —
such property is sold by such lessor
or any subsequent purchaser within 3 months after the date such property
was originally placed in service (or, in the case of multiple units
of property subject to the same lease, within 3 months after the date
the final unit is placed in service, so long as the period between
the time the first unit is placed in service and the time the last
unit is placed in service does not exceed 12 months), and
I.R.C. § 168(k)(2)(E)(iii)(III) —
the user of such property after the
last sale during such 3-month period remains the same as when such
property was originally placed in service,
such property shall be treated as
originally placed in service not earlier than the date of such last
sale.
I.R.C. § 168(k)(2)(F) Coordination With Section 280F —
For purposes of section 280F—
I.R.C. § 168(k)(2)(F)(i) Automobiles —
In the case of a passenger automobile (as defined in
section 280F(d)(5))
which is qualified property, the Secretary shall increase the limitation
under section 280F(a)(1)(A)(i) by
$8,000.
I.R.C. § 168(k)(2)(F)(ii) Listed Property —
The deduction allowable under paragraph (1) shall be taken into account
in computing any recapture amount under section 280F(b)(2).
I.R.C. § 168(k)(2)(F)(iii) Phase Down —
In the case of a passenger automobile acquired by the
taxpayer before September 28, 2017, and placed in service by the taxpayer
after September 27, 2017, clause (i) shall
be applied by substituting for “$8,000”—
I.R.C. § 168(k)(2)(F)(iii)(I) —
in the case of an automobile placed in
service during 2018, $6,400, and
I.R.C. § 168(k)(2)(F)(iii)(II) —
in the case of an automobile placed
in service during 2019, $4,800.
I.R.C. § 168(k)(2)(G) Deduction Allowed In Computing Minimum Tax —
For purposes of determining alternative minimum taxable
income under section 55,
the deduction under section 167 for
qualified property shall be determined without regard to any adjustment
under section 56.
I.R.C. § 168(k)(2)(H) Production Placed In Service —
For purposes of subparagraph (A)—
I.R.C. § 168(k)(2)(H)(i) —
a qualified film or television production
shall be considered to be placed in service at the time of initial
release or broadcast, and
I.R.C. § 168(k)(2)(H)(ii) —
a qualified live theatrical production
shall be considered to be placed in service at the time of the initial
live staged performance.
I.R.C. § 168(k)(3) —
[Repealed. Pub. L. 115-97, Sec. 13204(a)(4)(B)(ii).]
I.R.C. § 168(k)(4) —
[Repealed. Pub. L. 115-97, Sec. 12001(b)(13).]
I.R.C. § 168(k)(5) Special Rules For Certain Plants Bearing Fruits And Nuts
I.R.C. § 168(k)(5)(A) In General —
In the case of any specified plant which is planted before
January 1, 2027, or is grafted before such date to a plant that has
already been planted, by the taxpayer in the ordinary course of the
taxpayer's farming business (as defined in section 263A(e)(4)) during a taxable
year for which the taxpayer has elected the application of this paragraph—
I.R.C. § 168(k)(5)(A)(i) —
a depreciation deduction equal to the
applicable percentage of the adjusted basis of such specified plant
shall be allowed under section 167(a) for
the taxable year in which such specified plant is so planted or grafted,
and
I.R.C. § 168(k)(5)(A)(ii) —
the adjusted basis of such specified
plant shall be reduced by the amount of such deduction.
I.R.C. § 168(k)(5)(B) Specified Plant —
For purposes of this paragraph, the term “specified
plant” means—
I.R.C. § 168(k)(5)(B)(i) —
any tree or vine which bears fruits or
nuts, and
I.R.C. § 168(k)(5)(B)(ii) —
any other plant which will have more
than one crop or yield of fruits or nuts and which generally has a
pre-productive period of more than 2 years from the time of planting
or grafting to the time at which such plant begins bearing a marketable
crop or yield of fruits or nuts.
Such term shall not include any property
which is planted or grafted outside of the United States.
I.R.C. § 168(k)(5)(C) Election Revocable Only With Consent —
An election under this paragraph may be revoked only
with the consent of the Secretary.
I.R.C. § 168(k)(5)(D) Additional Depreciation May Be Claimed Only Once —
If this paragraph applies to any specified plant, such
specified plant shall not be treated as qualified property in the
taxable year in which placed in service.
I.R.C. § 168(k)(5)(E) Deduction Allowed In Computing Minimum Tax —
Rules similar to the rules of paragraph (2)(G) shall
apply for purposes of this paragraph.
I.R.C. § 168(k)(6) Applicable Percentage —
For purposes of this subsection—
I.R.C. § 168(k)(6)(A) In General —
Except as otherwise provided in this paragraph, the term “applicable
percentage” means—
I.R.C. § 168(k)(6)(A)(i) —
in the case of property placed in service
after September 27, 2017, and before January 1, 2023, 100 percent,
I.R.C. § 168(k)(6)(A)(ii) —
in the case of property placed in service
after December 31, 2022, and before January 1, 2024, 80 percent,
I.R.C. § 168(k)(6)(A)(iii) —
in the case of property placed in service
after December 31, 2023, and before January 1, 2025, 60 percent,
I.R.C. § 168(k)(6)(A)(iv) —
in the case of property placed in service
after December 31, 2024, and before January 1, 2026, 40 percent, and
I.R.C. § 168(k)(6)(A)(v) —
in the case of property placed in service
after December 31, 2025, and before January 1, 2027, 20 percent.
I.R.C. § 168(k)(6)(B) Rule For Property With Longer Production Periods —
In the case of property described in subparagraph (B)
or (C) of paragraph (2), the term “applicable percentage”
means—
I.R.C. § 168(k)(6)(B)(i) —
in the case of property placed in service
after September 27, 2017, and before January 1, 2024, 100 percent,
I.R.C. § 168(k)(6)(B)(ii) —
in the case of property placed in service
after December 31, 2023, and before January 1, 2025, 80 percent,
I.R.C. § 168(k)(6)(B)(iii) —
in the case of property placed in service
after December 31, 2024, and before January 1, 2026, 60 percent,
I.R.C. § 168(k)(6)(B)(iv) —
in the case of property placed in service
after December 31, 2025, and before January 1, 2027, 40 percent, and
I.R.C. § 168(k)(6)(B)(v) —
in the case of property placed in service
after December 31, 2026, and before January 1, 2028, 20 percent.
I.R.C. § 168(k)(6)(C) Rule For Plants Bearing Fruits And Nuts —
In the case of a specified plant described in paragraph
(5), the term “applicable percentage” means—
I.R.C. § 168(k)(6)(C)(i) —
in the case of a plant which is planted
or grafted after September 27, 2017, and before January 1, 2023, 100
percent,
I.R.C. § 168(k)(6)(C)(ii) —
in the case of a plant which is planted
or grafted after December 31, 2022, and before January 1, 2024, 80
percent,
I.R.C. § 168(k)(6)(C)(iii) —
in the case of a plant which is planted
or grafted after December 31, 2023, and before January 1, 2025, 60
percent,
I.R.C. § 168(k)(6)(C)(iv) —
in the case of a plant which is planted
or grafted after December 31, 2024, and before January 1, 2026, 40
percent, and
I.R.C. § 168(k)(6)(C)(v) —
in the case of a plant which is planted
or grafted after December 31, 2025, and before January 1, 2027, 20
percent.
I.R.C. § 168(k)(7) Election Out —
If a taxpayer makes an election under this paragraph
with respect to any class of property for any taxable year, paragraphs
(1) and (2)(F) shall not apply to any qualified property in such class
placed in service during such taxable year. An election under this
paragraph may be revoked only with the consent of the Secretary.
I.R.C. § 168(k)(8) Phase Down —
In the case of qualified property acquired by the taxpayer
before September 28, 2017, and placed in service by the taxpayer after
September 27, 2017, paragraph (6) shall be applied by substituting
for each percentage therein—
I.R.C. § 168(k)(8)(A) —
“50 percent” in the case
of—
I.R.C. § 168(k)(8)(A)(i) —
property placed in service before January
1, 2018, and
I.R.C. § 168(k)(8)(A)(ii) —
property described in subparagraph (B)
or (C) of paragraph (2) which is placed in service in 2018,
I.R.C. § 168(k)(8)(B) —
“40 percent” in the case
of—
I.R.C. § 168(k)(8)(B)(i) —
property placed in service in 2018 (other
than property described in subparagraph (B) or (C) of paragraph (2)),
and
I.R.C. § 168(k)(8)(B)(ii) —
property described in subparagraph (B)
or (C) of paragraph (2) which is placed in service in 2019,
I.R.C. § 168(k)(8)(C) —
“30 percent” in the case
of—
I.R.C. § 168(k)(8)(C)(i) —
property placed in service in 2019 (other
than property described in subparagraph (B) or (C) of paragraph (2)),
and
I.R.C. § 168(k)(8)(C)(ii) —
property described in subparagraph (B)
or (C) of paragraph (2) which is placed in service in 2020, and
I.R.C. § 168(k)(8)(D) —
“0 percent” in the case of—
I.R.C. § 168(k)(8)(D)(i) —
property placed in service after 2019
(other than property described in subparagraph (B) or (C) of paragraph
(2)), and
I.R.C. § 168(k)(8)(D)(ii) —
property described in subparagraph (B)
or (C) of paragraph (2) which is placed in service after 2020.
I.R.C. § 168(k)(9) Exception For Certain Property —
The term “qualified property” shall not include—
I.R.C. § 168(k)(9)(A) —
any property which is primarily used
in a trade or business described in clause (iv) of section 163(j)(7)(A), or
I.R.C. § 168(k)(9)(B) —
any property used in a trade or business
that has had floor plan financing indebtedness (as defined in paragraph
(9) of section 163(j)),
if the floor plan financing interest related to such indebtedness
was taken into account under paragraph (1)(C) of such section.
I.R.C. § 168(k)(10) Special Rule For Property Placed In Service During Certain Periods
I.R.C. § 168(k)(10)(A) In General —
In the case of qualified property placed in service by
the taxpayer during the first taxable year ending after September
27, 2017, if the taxpayer elects to have this paragraph apply for
such taxable year, paragraphs (1)(A) and (5)(A)(i) shall be applied
by substituting “50 percent” for “the applicable
percentage”.
I.R.C. § 168(k)(10)(B) Form Of Election —
Any election under this paragraph shall be made at such
time and in such form and manner as the Secretary may prescribe.
I.R.C. § 168(l) Special Allowance For Second Generation Biofuel Plant Property
I.R.C. § 168(l)(1) Additional Allowance —
In the case of any qualified second generation biofuel
plant property—
I.R.C. § 168(l)(1)(A) —
the depreciation deduction provided
by section 167(a) for
the taxable year in which such property is placed in service shall
include an allowance equal to 50 percent of the adjusted basis of
such property, and
I.R.C. § 168(l)(1)(B) —
the adjusted basis of such property
shall be reduced by the amount of such deduction before computing
the amount otherwise allowable as a depreciation deduction under this
chapter for such taxable year and any subsequent taxable year.
I.R.C. § 168(l)(2) Qualified Second Generation Biofuel Plant Property —
The term “qualified second generation biofuel
plant property” means property of a character subject to the
allowance for depreciation—
I.R.C. § 168(l)(2)(A) —
which is used in the United States solely
to produce second generation biofuel (as defined in section 40(b)(6)(E)),
I.R.C. § 168(l)(2)(B) —
the original use of which commences
with the taxpayer after the date of the enactment of this subsection,
I.R.C. § 168(l)(2)(C) —
which is acquired by the taxpayer by
purchase (as defined in section 179(d))
after the date of the enactment of this subsection, but only if no
written binding contract for the acquisition was in effect on or before
the date of the enactment of this subsection, and
I.R.C. § 168(l)(2)(D) —
which is placed in service by the taxpayer
before January 1, 2021.
I.R.C. § 168(l)(3) Exceptions
I.R.C. § 168(l)(3)(A) Bonus Depreciation Property Under Subsection (k) —
Such term shall not include any property to which subsection (k) applies.
I.R.C. § 168(l)(3)(B) Alternative Depreciation Property —
Such term shall not include any property described in
subsection (k)(2)(D).
I.R.C. § 168(l)(3)(C) Tax-Exempt Bond-Financed Property —
Such term shall not include any property any portion
of which is financed with the proceeds of any obligation the interest
on which is exempt from tax under section 103.
I.R.C. § 168(l)(3)(D) Election Out —
If a taxpayer makes an election under this subparagraph
with respect to any class of property for any taxable year, this subsection
shall not apply to all property in such class placed in service during
such taxable year.
I.R.C. § 168(l)(4) Special Rules —
For purposes of this subsection, rules similar to the
rules of subsection (k)(2)(E) shall apply.
I.R.C. § 168(l)(5) Allowance Against Alternative Minimum Tax —
For purposes of this subsection, rules similar to the
rules of subsection (k)(2)(G) shall
apply.
I.R.C. § 168(l)(6) Recapture —
For purposes of this subsection, rules similar to the
rules under section 179(d)(10) shall
apply with respect to any qualified second generation biofuel plant
property which ceases to be qualified second generation biofuel plant
property.
I.R.C. § 168(l)(7) Denial Of Double Benefit —
Paragraph (1) shall not apply to any qualified second
generation biofuel plant property with respect to which an election
has been made under section 179C (relating
to election to expense certain refineries).
I.R.C. § 168(m) Special Allowance For Certain Reuse And Recycling Property
I.R.C. § 168(m)(1) In General —
In the case of any qualified reuse and recycling property—
I.R.C. § 168(m)(1)(A) —
the depreciation deduction provided by
section 167(a) for
the taxable year in which such property is placed in service shall
include an allowance equal to 50 percent of the adjusted basis of
the qualified reuse and recycling property, and
I.R.C. § 168(m)(1)(B) —
the adjusted basis of the qualified reuse
and recycling property shall be reduced by the amount of such deduction
before computing the amount otherwise allowable as a depreciation
deduction under this chapter for such taxable year and any subsequent
taxable year.
I.R.C. § 168(m)(2) Qualified Reuse And Recycling Property —
For purposes of this subsection—
I.R.C. § 168(m)(2)(A) In General —
The term “qualified reuse and recycling property”
means any reuse and recycling property—
I.R.C. § 168(m)(2)(A)(i) —
to which this section applies,
I.R.C. § 168(m)(2)(A)(ii) —
which has a useful life of at least
5 years,
I.R.C. § 168(m)(2)(A)(iii) —
the original use of which commences
with the taxpayer after August 31, 2008, and
I.R.C. § 168(m)(2)(A)(iv) —
which is—
I.R.C. § 168(m)(2)(A)(iv)(I) —
acquired by purchase (as defined in section 179(d)(2)) by the taxpayer
after August 31, 2008, but only if no written binding contract for
the acquisition was in effect before September 1, 2008, or
I.R.C. § 168(m)(2)(A)(iv)(II) —
acquired by the taxpayer pursuant to
a written binding contract which was entered into after August 31,
2008.
I.R.C. § 168(m)(2)(B) Exceptions
I.R.C. § 168(m)(2)(B)(i) Bonus Depreciation Property Under Subsection (k) —
The term “qualified reuse and recycling property”
shall not include any property to which subsection (k) (determined without regard
to paragraph (4) thereof) applies.
I.R.C. § 168(m)(2)(B)(ii) Alternative Depreciation Property —
The term “qualified reuse and recycling property”
shall not include any property to which the alternative depreciation
system under subsection (g) applies, determined without regard to
paragraph (7) of subsection (g) (relating to election to have system
apply).
I.R.C. § 168(m)(2)(B)(iii) Election Out —
If a taxpayer makes an election under this clause with
respect to any class of property for any taxable year, this subsection
shall not apply to all property in such class placed in service during
such taxable year.
I.R.C. § 168(m)(2)(C) Special Rule For Self-Constructed Property —
In the case of a taxpayer manufacturing, constructing,
or producing property for the taxpayer's own use, the requirements
of clause (iv) of subparagraph (A) shall be treated as met if the
taxpayer begins manufacturing, constructing, or producing the property
after August 31, 2008.
I.R.C. § 168(m)(2)(D) Deduction Allowed In Computing Minimum Tax —
For purposes of determining alternative minimum taxable
income under section 55,
the deduction under subsection (a) for qualified reuse and recycling
property shall be determined under this section without regard to
any adjustment under section 56.
I.R.C. § 168(m)(3) Definitions —
For purposes of this subsection—
I.R.C. § 168(m)(3)(A) Reuse And Recycling Property
I.R.C. § 168(m)(3)(A)(i) In General —
The term “reuse and recycling property” means
any machinery and equipment (not including buildings or real estate),
along with all appurtenances thereto, including software necessary
to operate such equipment, which is used exclusively to collect, distribute,
or recycle qualified reuse and recyclable materials.
I.R.C. § 168(m)(3)(A)(ii) Exclusion —
Such term does not include rolling stock or other equipment
used to transport reuse and recyclable materials.
I.R.C. § 168(m)(3)(B) Qualified Reuse and Recyclable Materials
I.R.C. § 168(m)(3)(B)(i) In General —
The term “qualified reuse and recyclable materials”
means scrap plastic, scrap glass, scrap textiles, scrap rubber, scrap
packaging, recovered fiber, scrap ferrous and nonferrous metals, or
electronic scrap generated by an individual or business.
I.R.C. § 168(m)(3)(B)(ii) Electronic Scrap —
For purposes of clause (i), the term “electronic
scrap” means—
I.R.C. § 168(m)(3)(B)(ii)(I) —
any cathode ray tube, flat panel screen,
or similar video display device with a screen size greater than 4
inches measured diagonally, or
I.R.C. § 168(m)(3)(B)(ii)(II) —
any central processing unit.
I.R.C. § 168(m)(3)(C) Recycling Or Recycle —
The term “recycling” or “recycle”
means that process (including sorting) by which worn or superfluous
materials are manufactured or processed into specification grade commodities
that are suitable for use as a replacement or substitute for virgin
materials in manufacturing tangible consumer and commercial products,
including packaging.
(Added by Pub.
L. 97-34, title II, Sec. 201(a), Aug. 13, 1981, 95 Stat. 203, and amended by Pub. L. 97-248, title II, Sec. 206, 208(a)(1),
(2)(A), (b), 209(a), (b), 216(a), 224(c)(1), (2), Sept. 3, 1982, 96 Stat. 431, 432, 435, 442, 445, 470,
489; Pub. L. 97-354, Sec. 5(a)(19),
(20), Oct. 19, 1982, 96 Stat. 1693,
1694; Pub. L. 97-424, title V,
Sec. 541(a)(1), Jan. 6, 1983, 96 Stat.
2192; Pub. L. 97-448,
title I, Sec. 102(a)(1)–(5), (8)–(10)(A), (f)(4), Jan.
12, 1983, 96 Stat. 2367, 2368,
2371; Pub. L. 98-369, div. A, title
I, Sec. 12(a)(3), 31(a), (d), 32(a), 111(a)–(e)(4), (9), 113(a)(2),
(b)(1), (2)(A), title IV, Sec. 474(r)(7), title VI, Sec. 612(e)(4),
(5), 628(b), July 18, 1984, 98 Stat. 503,
509, 518, 530, 631-633, 636, 637, 840, 912, 931; Pub. L. 99-121, title I, Sec. 103(a), (b)(1)(A),
(2)–(4), Oct. 11, 1985, 99 Stat.
509; Pub. L. 99-514,
title II, Sec. 201(a), title XVIII, Sec. 1802(a)(1)–(2)(E)(i),
(G), (3), (4)(A), (B), (7), (b)(1), 1809(a)(1)–(2)(C)(i), (4)(A),
(B), (b)(1), (2), Oct. 22, 1986, 100
Stat. 2121, 2786-2789, 2791, 2818-2821; Pub. L. 100-647, title I, Sec. 1002(a)(5)–(8),
(11), (16)(B), (21), (23)(A), (i)(2)(A)–(G), 1018(b)(2), title
VI, Sec. 6027(a), (b), 6028(a), 6029(a)–(c), 6253, Nov. 10,
1988, 102 Stat. 3353-3356,
3370, 3371, 3577, 3693, 3694, 3753; Pub.
L. 101-239, title VII, Sec. 7816(e), (f), (w), Dec. 19,
1989, 103 Stat. 2421, 2423; Pub. L. 101-508, title XI, Sec. 11801(c)(8)(B),
11812(b)(2), 11813(b)(9), Nov. 5, 1990, 104
Stat. 1388-524, 1388-534, 1388-552; Pub.
L. 103-66, title XIII, Sec. 13151(a), 13321(a), Aug. 10,
1993; Pub. L. 104-88, title III,
Sec. 304, Dec. 29, 1995, 109 Stat. 943; Pub. L. 104-188, title I, Sec. 1120, 1121(a),
1613(b), 1702(h)(1), 1704(t)(54), Aug. 20, 1996, 110 Stat. 1755; Pub.
L. 105-34, title X, XII, XVI, Sec. 1086(b), 1213(c), 1604(c),
Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec. 6006(b),
July 22, 1998, 112 Stat 685; Pub. L. 107-147, title I, VI, Sec. 101(a),
613(b), Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-27, title II, Sec. 201, May
28, 2003, 117 Stat. 752; Pub. L. 108-311, title III, IV, Sec. 316,
403(a), 408(a), Oct. 4, 2004, 118 Stat.
1166; Pub. L. 108-357,
title II, III, VII, VIII, IX, Sec. 211, 336, 337, 704, 706, 847, 901;
Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-58, title XIII, Sec. 1301(f)(5),
1308, 1325, 1326, Aug. 8, 2005, 119 Stat.
594; Pub. L. 109-135,
title IV, Sec. 403(j), 405(a)(1), 410(a), 412(s), Dec. 21, 2005, 119 Stat. 2577; Pub.
L. 109-432, div. A, title I, II, Sec. 112(a), 113(a), 209(a),
Dec. 20, 2006, 120 Stat. 432; Pub. L. 110-172, Sec. 11(b)(1),
Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110-185, Sec. 103, Feb. 13,
2008, 122 Stat. 613; Pub. L. 110-246, title XV, Sec. 15344(a),
June 18, 2008, 122 Stat. 1651; Pub. L. 110-289, div. A, title III, Sec.
3081, July 30, 2008, 122 Stat. 2654; Pub. L. 110-343, div. B, title II, Sec.
201, title III, Sec. 306, 308(a), div. C, title III, Sec. 305, 315,
317, title V, Sec. 505, title VII, 710(a), Oct. 3, 2008, 122 Stat. 3765; Pub.
L. 111-5, div. B, title I, Sec. 1201, Feb. 17, 2009, 123 Stat. 115; Pub.
L. 111-240, title II, Sec. 2022, Sept. 27, 2010, 124 Stat. 2504; Pub.
L. 111-312, title IV, VII, Sec. 401, 737, 738, 739, Dec.
17, 2010, 124 Stat. 3296; Pub. L. 112-240, title III, IV, Sec. 311,
312, 313, 331, 410, Jan. 2, 2013, 126
Stat. 2313; Pub. L. 113-295,
Div. A, title I, Sec. 121(a), 122(a), 123(a), 124(a), 125(a), 125(c),
125(d), 157(a), title II, Sec. 202(e), 210(c), 210(d), 210(g)(2),
211(b), 212(b), 214(b), Dec. 19, 2014, 128
Stat. 4010; Pub. L. 114-113,
Div. Q, title I, Sec. 123, 143, 165, 166(a), 167, 189, Dec. 18, 2015; Pub. L. 115-97, Secs. 12001, 13201,
13203, 13204(a), 13205(a), 13504(b), Dec. 22, 2017, 131 Stat. 2054; Pub.
L. 115-123, Div. D, title I, Secs. 40304(a), 40305(a), 40306(a),
40412(a), Feb. 9, 2018, 132 Stat. 64; Pub. L. 115-141, Div. U, title I, Sec.
101(d), (e), title III, Sec. 302(a), title IV, Sec. 401(a)(49), (50),
401(b)(13)(A), 401(d)(1)(D)(iv), Mar. 23, 2018, 132 Stat. 348; Pub.
L. 116-94, Div. Q, title I, Secs. 114(a), 115(a), 116(a),
130(a), Dec. 20, 2019; Pub. L. 116-136,
Div. A, title II, Sec. 2307, Mar. 27, 2020; Pub.
L. 116-260, Div. EE, title I, Sec. 115(a), 137(a), 138(a),
Dec. 27, 2020, 134 Stat. 1182; Pub. L. 117-169,
title I, Sec. 168(e)(3)(B)(vi)(III), (vii), Aug. 16, 2022, 136 Stat.
1818.)
BACKGROUND NOTES
AMENDMENTS
2022 — Subsec. (e)(3)(B)(vi)(III). Pub. L. 117-169, Sec. 13703(a)(1), amended
subclause (III) by striking “and” at the end.
Subsec. (e)(3)(B)(vii). Pub.
L. 117-169, Sec. 13703(a)(2), amended clause (vii) by substituting “,
and” for the period at the end.
Subsec. (e)(3)(B)(viii). Pub.
L. 117-169, Sec. 13703(a)(3), added clause (viii).
2020 — Subsec. (e)(3)(A)(i)(I). Pub. L. 116-260, Div. EE, Sec. 137(a)(1),
amended subclause (I) by substituting “January 1, 2022”
for “January 1, 2021”.
Subsec. (e)(3)(A)(i)(II). Pub.
L. 116-260, Div. EE, Sec. 137(a)(2), amended subclause (II)
by substituting “December 31, 2021” for “December
31, 2020”.
Subsec. (i)(15)(D). Pub.
L. 116-260, Div. EE, Sec. 115(a), amended subpar. (D) by
substituting “December 31, 2025” for “December 31,
2020”.
Subsec. (j)(9). Pub.
L. 116-260, Div. EE, Sec. 138(a), amended par. (9) by substituting “December
31, 2021” for “December 31, 2020”.
Subsec. (e)(3)(E)(v). Pub. L. 116-136, Sec. 2307(a)(1)(A),
amended clause (v) by striking “and” at the end.
Subsec. (e)(3)(E)(vi). Pub. L. 116-136, Sec. 2307(a)(1)(A),
amended clause (vi) by substituting “, and” for the period
at the end.
Subsec. (e)(3)(E)(vii). Pub. L. 116-136, Sec. 2307(a)(1)(A),
amended subpar. (E) by adding clause (vii).
Subsec. (e)(6)(A). Pub. L. 116-136, Sec. 2307(a)(1)(B),
amended subpar. (A) by inserting “made by the taxpayer”
after “any improvement”.
Subsec. (g)(3)(B). Pub. L. 116-136, Sec. 2307(a)(2)(A),
amended the table in subpar. (B) by striking the item relating to
subpar. (D)(v).
Subsec. (g)(3)(B). Pub. L. 116-136, Sec. 2307(a)(2)(B),
amended the table in subpar. (B) by adding the following new item
after the item relating to subpar. (E)(vi):
“(E)(vii) .......................................................................................
20”
2019 — Subsec. (e)(3)(A)(i)(I). Pub. L. 116-94, Sec. 114(a)(1),
amended subclause (I) by substituting “January 1, 2021”
for “January 1, 2018”.
Subsec. (e)(3)(A)(i)(II). Pub. L. 116-94, Sec. 114(a)(2),
amended subclause (II) by substituting “December 31, 2020”
for “December 31, 2017”.
Subsec. (i)(15)(D). Pub.
L. 116-94, Sec. 115(a), amended subpar. (D) by substituting “December
31, 2020” for “December 31, 2017”.
Subsec. (j)(9). Pub.
L. 116-94, Sec. 116(a), amended par. (9) by substituting “December
31, 2020” for “December 31, 2017”.
Subsec. (l)(2)(D). Pub.
L. 116-94, Sec. 130(a), amended subpar. (D) by substituting “January
1, 2021” for “January 1, 2018”.
2018 — Subsec. (d)(3)(B)(i). Pub. L. 115-141, Div. U, Sec. 401(a)(49),
amended clause (i) by inserting a comma after “real property”.
Subsec. (e)(3)(B). Pub.
L. 115-141, Div. U, Sec. 302(a)(2), amended subpar. (B)
by substituting “clause (vi)(I) (or the corresponding provisions
of prior law) by reason of being public utility property (within the
meaning of section 48(a)(3)).” for “subclause (I) or (II)
of clause (vi) by reason of being a public utility property.”
Subsec. (e)(3)(B)(vi)(II). Pub.
L. 115-141, Div. U, Sec. 302(a)(1), amended subclause (II)
by substituting “has a power production capacity of not greater
than 80 megawatts, or” for “is a qualifying small power
production facility within the meaning of section 3(17)(C) of the
Federal Power Act (16 U.S.C. 796(17)(C)),
as in effect on September 1, 1986, or”.
Subsec. (e)(3)(C)(i). Pub.
L. 115-141, Div. U, Sec. 401(a)(50), amended clause (i)
by striking “and”.
Subsec. (g)(4)(G). Pub.
L. 115-141, Div. U, Sec. 401(d)(1)(D)(iv), amended subpar.
(G) by striking “(other than a corporation which has an election
in effect under section 936)”.
Subsec. (k)(2)(b)(i)(III). Pub.
L. 115-141, Div. U, Sec. 101(d)(1), amended subclause (III)
by inserting “binding” before “contract”.
Subsec. (k)(5)(B)(ii). Pub.
L. 115-141, Div. U, Sec. 101(d)(2), amended clause (ii)
by inserting “crop or” after “more than one”
and by inserting “a marketable crop or yield of” after “begins
bearing”.
Subsec. (j)(3). Pub.
L. 115-141, Div. U, Sec. 101(e)(1), amended par. (3) by
substituting “qualified Indian reservation property” for “property
to which paragraph (1) applies”.
Subsec. (j)(8). Pub.
L. 115-141, Div. U, Sec. 101(e)(2), amended par. (8) by
substituting “paragraph (1)” for “this subsection”.
Subsec. (n). Pub. L.
115-141, Div. U, Sec. 401(b)(13)(A), struck subsec. (n).
Before being struck, it read as follows:
“(n) Special Allowance For Qualified Disaster
Assistance Property
“(1) In General.—In the case of any
qualified disaster assistance property—
“(A) the depreciation deduction provided
by section 167(a) for the taxable year in which such property is placed
in service shall include an allowance equal to 50 percent of the adjusted
basis of the qualified disaster assistance property, and
“(B) the adjusted basis of the qualified
disaster assistance property shall be reduced by the amount of such
deduction before computing the amount otherwise allowable as a depreciation
deduction under this chapter for such taxable year and any subsequent
taxable year.
“(2) Qualified Disaster Assistance Property.—For
purposes of this subsection—
“(A) In General.—The term “qualified
disaster assistance property” means any property—
“(i)(I) which is described in subsection
(k)(2)(A)(i), or
“(II) which is nonresidential real property
or residential rental property,
“(ii) substantially all of the use of which
is—
“(I) in a disaster area with respect to a
federally declared disaster occurring before January 1, 2010, and
“(II) in the active conduct of a trade or
business by the taxpayer in such disaster area,
“(iii) which—
“(I) rehabilitates property damaged, or replaces
property destroyed or condemned, as a result of such federally declared
disaster, except that, for purposes of this clause, property shall
be treated as replacing property destroyed or condemned if, as part
of an integrated plan, such property replaces property which is included
in a continuous area which includes real property destroyed or condemned,
and
“(II) is similar in nature to, and located
in the same county as, the property being rehabilitated or replaced,
“(iv) the original use of which in such disaster
area commences with an eligible taxpayer on or after the applicable
disaster date,
“(v) which is acquired by such eligible taxpayer
by purchase (as defined in section 179(d)) on or after the applicable
disaster date, but only if no written binding contract for the acquisition
was in effect before such date, and
“(vi) which is placed in service by such
eligible taxpayer on or before the date which is the last day of the
third calendar year following the applicable disaster date (the fourth
calendar year in the case of nonresidential real property and residential
rental property).
“(B) Exceptions.—
“(i) Other Bonus Depreciation Property.—The
term “qualified disaster assistance property” shall not
include—
“(I) any property to which subsection (k)
(determined without regard to paragraph (4)), (l), or (m) applies,
“(II) any property to which section 1400N(d)
applies, and
“(III) any property described in section
1400N(p)(3).
“(ii) Alternative Depreciation Property.—The
term “qualified disaster assistance property” shall not
include any property to which the alternative depreciation system
under subsection (g) applies, determined without regard to paragraph
(7) of subsection (g) (relating to election to have system apply).
“(iii) Tax-Exempt Bond Financed Property.—Such
term shall not include any property any portion of which is financed
with the proceeds of any obligation the interest on which is exempt
from tax under section 103.
“(iv) Qualified Revitalization Buildings.—Such
term shall not include any qualified revitalization building with
respect to which the taxpayer has elected the application of paragraph
(1) or (2) of section 1400I(a).
“(v) Election Out.—If a taxpayer makes
an election under this clause with respect to any class of property
for any taxable year, this subsection shall not apply to all property
in such class placed in service during such taxable year.
“(C) Special Rules.—For purposes of
this subsection, rules similar to the rules of subparagraph (E) of
subsection (k)(2) shall apply, except that such subparagraph shall
be applied—
“(i) by substituting “the applicable
disaster date” for “December 31, 2007”
“(ii) without regard to “and before
January 1, 2015” in clause (i) thereof, and
“(iii) by substituting “qualified disaster
assistance property” for “qualified property” in
clause (iv) thereof.
“(D) Allowance Against Alternative Minimum
Tax.—For purposes of this subsection, rules similar to the rules
of subsection (k)(2)(G) shall apply.
“(3) Other Definitions.—For purposes
of this subsection—
“(A) Applicable Disaster Date.—The
term “applicable disaster date” means, with respect to
any federally declared disaster, the date on which such federally
declared disaster occurs.
“(B) Federally Declared Disaster.—The
term “federally declared disaster” has the meaning given
such term under section 165(h)(3)(C)(i).
“(C) Disaster Area.—The term “disaster
area” has the meaning given such term under section 165(h)(3)(C)(ii).
“(D) Eligible Taxpayer.—The term “eligible
taxpayer” means a taxpayer who has suffered an economic loss
attributable to a federally declared disaster.
“(4) Recapture.—For purposes of this
subsection, rules similar to the rules under section 179(d)(10) shall
apply with respect to any qualified disaster assistance property which
ceases to be qualified disaster assistance property.”
Subsec. (e)(3)(A)(i). Pub.
L. 115-123, Div. D, Sec. 40304(a), amended clause (i) by
substituting “January 1, 2018” for “January 1, 2017”
in subclause (I), and substituting “December 31, 2017”
for “December 31, 2016” in subclause (II).
Subsec. (i)(15)(D). Pub.
L. 115-123, Div. D, Sec. 40305(a), amended subpar. (D) by
substituting “December 31, 2017” for “December 31,
2016”.
Subsec. (j)(9). Pub.
L. 115-123, Div. D, Sec. 40306(a), amended par. (9) by substituting “December
31, 2017” for “December 31, 2016”.
Subsec. (l)(2)(D). Pub.
L. 115-123, Div. D, Sec. 40412(a), amended subpar. (D) by
substituting “January 1, 2018” for “January 1, 2017”.
2017 — Subsec. (b)(2)(B)–(D). Pub. L. 115-97, Sec. 13203(b),
amended par. (2) by striking subpar. (B) and by redesignating subpar.
(C) and (D) as subpar. (B) and (C), respectively. Before being struck,
subpar. (B) read as follows:
“(B) any property used in a farming business
(within the meaning of section 263A(e)(4)),”.
Subsec. (b)(3)(G)–(I). Pub. L. 115-97, Sec. 13204(a)(2)(A),
amended par. (3) by striking subpar. (G), (H), and (I) and by adding
a new subpar. (G). Before being struck, they read as follows:
“(G) Qualified leasehold improvement property
described in subsection (e)(6).”
“(H) Qualified restaurant property described
in subsection (e)(7).”
“(I) Qualified retail improvement property
described in subsection (e)(8).”
Subsec. (e)(3)(B)(vii). Pub. L. 115-97, Sec. 13203(a),
amended clause (vii) by substituting “after December 31, 2017”
for “after December 31, 2008, and which is placed in service
before January 1, 2010”.
Subsec. (e)(3)(E)(iv)–(ix). Pub. L. 115-97, Sec. 13204(a)(1)(A),
amended subpar. (E) by striking clauses (iv), (v), and (ix), by inserting “and”
at the end of clause (vii), by substituting a period for “,
and” at the end of clause (viii), and by redesignating clauses
(vi), (vii), and (viii) as clauses (iv), (v), and (vi), respectively.
Before being struck, clauses (iv), (v) and (ix) read as follows:
“(iv) any qualified leasehold improvement
property,”.
“(v) any qualified restaurant property,”.
“(ix) any qualified retail improvement property.”.
Subsec. (e)(6)–(8). Pub. L. 115-97, Sec. 13204(a)(1)(B),
struck par. (6), (7), and (8). Before being struck, they read as follows:
“(6) Qualified Leasehold Improvement Property.—For
purposes of this subsection—
“(A) In General.—The term ‘qualified
leasehold improvement property' means any improvement to an interior
portion of a building which is nonresidential real property if—
“(i) such improvement is made under or pursuant
to a lease (as defined in subsection (h)(7))—
“(I) by the lessee (or any sublessee) of
such portion, or
“(II) by the lessor of such portion,
“(ii) such portion is to be occupied exclusively
by the lessee (or any sublessee) of such portion, and
“(iii) such improvement is placed in service
more than 3 years after the date the building was first placed in
service.
“(B) Certain Improvements Not Included.—Such
term shall not include any improvement for which the expenditure is
attributable to—
“(i) the enlargement of the building,
“(ii) any elevator or escalator,
“(iii) any structural component benefitting
a common area, or
“(iv) the internal structural framework of
the building.
“(C) Definitions And Special Rules.—For
purposes of this paragraph—
“(i) Commitment To Lease Treated As Lease.—A
commitment to enter into a lease shall be treated as a lease, and
the parties to such commitment shall be treated as lessor and lessee,
respectively.
“(ii) Related Persons.—A lease between
related persons shall not be considered a lease. For purposes of the
preceding sentence, the term ‘related persons' means—
“(I) members of an affiliated group (as defined
in section 1504), and
“(II) persons having a relationship described
in subsection (b) of section 267; except that, for purposes of this
clause, the phrase ‘80 percent or more' shall be substituted
for the phrase “more than 50 percent” each place it appears
in such subsection.
“(D) Improvements Made By Lessor.—In
the case of an improvement made by the person who was the lessor of
such improvement when such improvement was placed in service, such
improvement shall be qualified leasehold improvement property (if
at all) only so long as such improvement is held by such person.
“(E) Exception For Changes In Form Of Business.—Property
shall not cease to be qualified leasehold improvement property under
subparagraph (D) by reason of—
“(i) death,
“(ii) a transaction to which section 381(a)
applies,
“(iii) a mere change in the form of conducting
the trade or business so long as the property is retained in such
trade or business as qualified leasehold improvement property and
the taxpayer retains a substantial interest in such trade or business,
“(iv) the acquisition of such property in
an exchange described in section 1031, 1033, or 1038 to the extent
that the basis of such property includes an amount representing the
adjusted basis of other property owned by the taxpayer or a related
person, or
“(v) the acquisition of such property by
the taxpayer in a transaction described in section 332, 351, 361,
721, or 731 (or the acquisition of such property by the taxpayer from
the transferee or acquiring corporation in a transaction described
in such section), to the extent that the basis of the property in
the hands of the taxpayer is determined by reference to its basis
in the hands of the transferor or distributor.”
“(7) Qualified Restaurant Property
“(A) In General.—The term ‘qualified
restaurant property' means any section 1250 property which is—
“(i) a building, or
“(ii) an improvement to a building,
“if more than 50 percent of the building's
square footage is devoted to preparation of, and seating for on-premises
consumption of, prepared meals.
“(B) Exclusion From Bonus Depreciation.—Property
described in this paragraph which is not qualified improvement property
shall not be considered qualified property for purposes of subsection
(k).”
“(8) Qualified Retail Improvement Property
“(A) In General.—The term ‘qualified
retail improvement property' means any improvement to an interior
portion of a building which is nonresidential real property if—
“(i) such portion is open to the general
public and is used in the retail trade or business of selling tangible
personal property to the general public, and
“(ii) such improvement is placed in service
more than 3 years after the date the building was first placed in
service.
“(B) Improvements Made By Owner.—In
the case of an improvement made by the owner of such improvement,
such improvement shall be qualified retail improvement property (if
at all) only so long as such improvement is held by such owner. Rules
similar to the rules under paragraph (6)(B) shall apply for purposes
of the preceding sentence.
“(C) Certain Improvements Not Included.—Such
term shall not include any improvement for which the expenditure is
attributable to—
“(i) the enlargement of the building,
“(ii) any elevator or escalator,
“(iii) any structural component benefitting
a common area, or
“(iv) the internal structural framework of
the building.”
Subsec. (e)(6). Pub. L. 115-97, Sec. 13204(a)(4)(B)(i),
added new par. (6).
Subsec. (g)(1)(D)–(F). Pub. L. 115-97, Sec. 13204(a)(3)(A)(i),
amended par. (1) by striking “and” at the end of subpar.
(D), by adding “and” at the end of subpar. (E), and by
adding subpar. (F).
Subsec. (g)(1)(E)–(G). Pub. L. 115-97, Sec. 13205(a),
amended par. (1) by striking “and” at the end of subpar.
(E), by adding “and” at the end of subpar. (F), and by
adding subpar. (G).
Subsec. (g)(2)(C). Pub. L. 115-97, Sec. 13204(a)(3)(C),
amended the table in subpar. (C) by substituting clauses (iii) through
(v) for clauses (iii) and (iv). Before being amended, the items read
as follows:
“(iii) Nonresidential real and residential
rental property................. 40 years.
‘(iv) Any railroad grading or tunnel bore
or water utility property........ 50 years.”
Subsec. (g)(3)(B). Pub. L. 115-97, Sec. 13205(a)(3)(B),
amended the table in subpar. (B) by substituting the items for (E)(iv)
through (E)(vi) for the items for (E)(iv) through (E)(ix). Before
being struck, items (E)(iv) through (E)(ix) read as follows:
“(E)(iv).......................................
39
“(E)(v)........................................
39
“(E)(vi).......................................
20
“(E)(vii)......................................
30
“(E)(viii).....................................
35
“(E)(ix).......................................
39”
Subsec. (g)(8). Pub. L. 115-97, Sec. 13204(a)(3)(A)(ii),
amended subsec. (g) by adding par. (8).
Subsec. (i)(7)(B). Pub. L. 115-97, Sec. 13504(b)(1),
amended subpar. (B) by striking the second sentence. Before being
struck, it read as follows:
“Subparagraph (A) shall not apply in the
case of a termination of a partnership under section 708(b)(1)(B).”
Subsec. (k). Pub.
L. 115-97, Sec. 13201(b)(2)(B), amended the heading of subsec.
(k) by removing “Acquired After December 31, 2007, And Before
January 1, 2020”.
Subsec. (k)(1)(A). Pub. L. 115-97, Sec. 13201(a)(1)(A),
amended subpar. (A) by substituting “the applicable percentage”
for “50 percent”.
Subsec. (k)(2)(A)(i)(II)–(V). Pub. L. 115-97, Sec. 13201(g)(1),
amended clause (i) by striking “or” in subclause (II),
by adding “or” after the comma in subclause (III), and
by adding subclause (IV) and (V).
Subsec. (k)(2)(A)(i)(II)–(IV). Pub. L. 115-97, Sec. 13204(a)(4)(A),
amended clause (i) by inserting “or” after the comma in
subclause (II), by striking “or” at the end of subclause
(III), and by striking (IV). Before being struck, subclause (IV) read
as follows:
“(IV) which is qualified improvement property,”.
Subsec. (k)(2)(A)(ii). Pub. L. 115-97, Sec. 13201(c)(1),
amended clause (ii). Before amendment, it read as follows:
“(ii) the original use of which commences
with the taxpayer, and”.
Subsec. (k)(2)(A)(iii). Pub. L. 115-97, Sec. 13201(b)(1)(A)(i),
amended clause (iii) by substituting “January 1, 2027”
for “January 1, 2020” each place it appeared.
Subsec. (k)(2)(B)(i)(II). Pub. L. 115-97, Sec. 13201(b)(1)(A)(ii)(I),
amended subclause (II) by substituting “January 1, 2028”
for “January 1, 2021”.
Subsec. (k)(2)(B)(i)(III). Pub. L. 115-97, Sec. 13201(b)(1)(A)(i),
amended subclause (III) by substituting “January 1, 2027”
for “January 1, 2020” each place it appeared.
Subsec. (k)(2)(B)(ii). Pub. L. 115-97, Sec. 13201(b)(1)(A)(ii)(II),
amended the heading of clause (ii) by substituting “Pre-January
1, 2027” for “Pre-January 1, 2020”.
Subsec. (k)(2)(B)(ii). Pub. L. 115-97, Sec. 13201(b)(1)(A)(i),
amended clause (ii) by substituting “January 1, 2027”
for “January 1, 2020” each place it appeared.
Subsec. (k)(2)(E)(i). Pub. L. 115-97, Sec. 13201(b)(1)(A)(i),
amended clause (i) by substituting “January 1, 2027” for “January
1, 2020” each place it appeared.
Subsec. (k)(2)(E)(ii). Pub. L. 115-97, Sec. 13201(c)(2),
amended clause (ii). Before amendment, it read as follows:
“(ii) Sale-Leasebacks.—For purposes
of clause (iii) and subparagraph (A)(ii), if property is—
“(I) originally placed in service by a person,
and
“(II) sold and leased back by such person
within 3 months after the date such property was originally placed
in service,
“such property shall be treated as originally
placed in service not earlier than the date on which such property
is used under the leaseback referred to in subclause (II).”
Subsec. (k)(2)(E)(iii)(I). Pub. L. 115-97, Sec. 13201(c)(3),
amended subclause (I). Before amendment, it read as follows:
“(I) property is originally placed in service
by the lessor of such property,”.
Subsec. (k)(2)(F)(iii). Pub. L. 115-97, Sec. 13201(f),
amended clause (iii) by substituting “acquired by the taxpayer
before September 28, 2017, and placed in service by the taxpayer after
September 27, 2017” for “placed in service by the taxpayer
after December 31, 2017”.
“(I) property is originally placed in service
by the lessor of such property,”.
Subsec. (k)(2)(H). Pub. L. 115-97, Sec. 13201(g)(2),
amended par. (2) by adding subpar. (H).
Subsec. (k)(3). Pub. L. 115-97, Sec. 13204(a)(4)(B)(ii),
amended subsec. (k) by striking par. (3). Before being struck, it
read as follows:
“(3) Qualified Improvement Property.—For
purposes of this subsection—
“(A) In General.—The term ‘qualified
improvement property' means any improvement to an interior portion
of a building which is nonresidential real property if such improvement
is placed in service after the date such building was first placed
in service.
“(B) Certain Improvements Not Included.—Such
term shall not include any improvement for which the expenditure is
attributable to—
“(i) the enlargement of the building,
“(ii) any elevator or escalator, or
“(iii) the internal structural framework
of the building.”
Subsec. (k)(4). Pub.
L. 115-97, Sec. 12001(b)(13), amended subsec. (k) by striking
par. (4). Before being struck, it read as follows:
“(4) Election To Accelerate AMT Credits In
Lieu Of Bonus Depreciation
“(A) In General.—If a corporation elects
to have this paragraph apply for any taxable year—
“(i) paragraphs (1) and (2)(F) shall not
apply to any qualified property placed in service during such taxable
year,
“(ii) the applicable depreciation method
used under this section with respect to such property shall be the
straight line method, and
“(iii) the limitation imposed by section
53(c) for such taxable year shall be increased by the bonus depreciation
amount which is determined for such taxable year under subparagraph
(B).
“(B) Bonus Depreciation Amount.—For
purposes of this paragraph—
“(i) In General.—The bonus depreciation
amount for any taxable year is an amount equal to 20 percent of the
excess (if any) of—
“(I) the aggregate amount of depreciation
which would be allowed under this section for qualified property placed
in service by the taxpayer during such taxable year if paragraph (1)
applied to all such property (and, in the case of any such property
which is a passenger automobile (as defined in section 280F(d)(5)),
if paragraph (2)(F) applied to such automobile), over
“(II) the aggregate amount of depreciation
which would be allowed under this section for qualified property placed
in service by the taxpayer during such taxable year if paragraphs
(1) and (2)(F) did not apply to any such property.
“The aggregate amounts determined under subclauses
(I) and (II) shall be determined without regard to any election made
under subparagraph (A) or subsection (b)(2)(D), (b)(3)(D), or (g)(7).
“(ii) Limitation.—The bonus depreciation
amount for any taxable year shall not exceed the lesser of—
“(I) 50 percent of the minimum tax credit
under section 53(b) for the first taxable year ending after December
31, 2015, or
“(II) The minimum tax credit under section
53(b) for such taxable year determined by taking into account only
the adjusted net minimum tax for taxable years ending before January
1, 2016 (determined by treating credits as allowed on a first-in,
first-out basis).
“(iii) Aggregation Rule.—All corporations
which are treated as a single employer under section 52(a) shall be
treated—
“(I) as 1 taxpayer for purposes of this paragraph,
and
“(II) as having elected the application of
this paragraph if any such corporation so elects.
“(C) Credit Refundable.—For purposes
of section 6401(b), the aggregate increase in the credits allowable
under part IV of subchapter A for any taxable year resulting from
the application of this paragraph shall be treated as allowed under
subpart C of such part (and not any other subpart).
“(D) Other Rules.—
“(i) Election.—Any election under this
paragraph may be revoked only with the consent of the Secretary.
“(ii) Partnerships With Electing Partners.—In
the case of a corporation which is a partner in a partnership and
which makes an election under subparagraph (A) for the taxable year,
for purposes of determining such corporation's distributive share
of partnership items under section 702 for such taxable year—
“(I) paragraphs (1) and (2)(F) shall not
apply to any qualified property placed in service during such taxable
year, and
“(II) the applicable depreciation method
used under this section with respect to such property shall be the
straight line method.
“(iii) Certain Partnerships.—In the
case of a partnership in which more than 50 percent of the capital
and profits interests are owned (directly or indirectly) at all times
during the taxable year by 1 corporation (or by corporations treated
as 1 taxpayer under subparagraph (B)(iii)), each partner shall compute
its bonus depreciation amount under clause (i) of subparagraph (B)
by taking into account its distributive share of the amounts determined
by the partnership under subclauses (I) and (II) of such clause for
the taxable year of the partnership ending with or within the taxable
year of the partner.”
Subsec. (k)(5)(A). Pub. L. 115-97, Sec. 13201(b)(1)(B),
amended subpar. (A) by substituting “January 1, 2027”
for “January 1, 2020”.
Subsec. (k)(5)(A)(i). Pub. L. 115-97, Sec. 13201(a)(1)(B),
amended clause (i) by substituting “the applicable percentage”
for “50 percent”.
Subsec. (k)(5)(F). Pub. L. 115-97, Sec. 13201(a)(3)(A),
amended par. (5) by striking subpar. (F). Before being struck, it
read as follows:
“(F) Phase Down.—In the case of a specified
plant which is planted after December 31, 2017 (or is grafted to a
plant that has already been planted before such date), subparagraph
(A)(i) shall be applied by substituting for ‘50 percent'—
“(i) in the case of a plant which is planted
(or so grafted) in 2018, ‘40 percent', and
“(ii) in the case of a plant which is planted
(or so grafted) during 2019, ‘30 percent'.”
Subsec. (k)(6). Pub.
L. 115-97, Sec. 13201(a)(2), amended par. (6). Before amendment,
it read as follows:
“(6) Phase Down.—In the case of qualified
property placed in service by the taxpayer after December 31, 2017,
paragraph (1)(A) shall be applied by substituting for ‘50 percent'—
“(A) in the case of property placed in service
in 2018 (or in the case of property placed in service in 2019 and
described in paragraph (2)(B) or (C) (determined by substituting ‘2019'
for ‘2020' in paragraphs (2)(B)(i)(III) and (ii) and paragraph
(2)(E)(i)), ‘40 percent',
“(B) in the case of property placed in service
in 2019 (or in the case of property placed in service in 2020 and
described in paragraph (2)(B) or (C), ‘30 percent'.”
Subsec. (k)(8). Pub. L. 115-97, Sec. 13201(a)(3)(B),
amended subsec. (k) by adding par. (8).
Subsec. (k)(9). Pub.
L. 115-97, Sec. 13201(d), amended subsec. (k) by adding
par. (9).
Subsec. (k)(10). Pub.
L. 115-97, Sec. 13201(e), amended subsec. (k) by adding
par. (10).
2015 — Subsec. (e)(3)(A)(i)(I). Pub. L. 114-113, Div. Q, Sec. 165(a)(1),
amended subclause (I) by substituting “January 1, 2017”
for “January 1, 2015”.
Subsec. (e)(3)(A)(i)(II). Pub.
L. 114-113, Div. Q, Sec. 165(a)(2), amended subclause (II)
by substituting “December 31, 2016” for “December
31, 2014”
Subsec. (e)(3)(E)(iv). Pub.
L. 114-113, Div. Q, Sec. 123(a), amended clause (iv) by
striking “placed in service before January 1, 2015”.
Subsec. (e)(3)(E)(v). Pub.
L. 114-113, Div. Q, Sec. 123(a), amended clause (v) by striking “placed
in service before January 1, 2015”.
Subsec. (e)(3)(E)(ix). Pub.
L. 114-113, Div. Q, Sec. 123(b), amended clause (ix) by
striking “placed in service after December 31, 2008, and before
January 1, 2015”.
Subsec. (e)(6). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(A), amended par. (6)
by redesignating subpar. (A) and (B) as subpar. (D) and (E), respectively,
by striking all that precedes subpar. (D), as redesignated, and inserting
the language preceding subpar. (D). Before being struck, the language
preceding subpar. (D), as redesignated, read as follows:
“(6) Qualified Leasehold Improvement Property.—The
term “qualified leasehold improvement property” has the
meaning given such term in section 168(k)(3) except that the following
special rules shall apply:”.
Subsec. (e)(7)(B). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(B), amended subpar. (B)
by substituting “qualified improvement property” for “qualified
leasehold improvement property”.
Subsec. (e)(8)(D). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(C), amended par. (8)
by striking subpar. (D). Before being struck, it read as follows:
“(D) Exclusion From Bonus Depreciation.—Property
described in this paragraph which is not qualified leasehold improvement
property shall not be considered qualified property for purposes of
subsection (k).”
Subsec. (i)(15)(D). Pub.
L. 114-113, Div. Q, Sec. 166(a), amended subpar. (D) by
substituting “December 31, 2016” for “December 31,
2014”.
Subsec. (j)(8). Pub.
L. 114-113, Div. Q, Sec. 167(a), amended par. (8) by substituting “December
31, 2016” for “December 31, 2014”.
Subsec. (j)(8)–(9). Pub.
L. 114-113, Div. Q, Sec. 167(b), redesignated par. (8) as
par. (9) and added a new par. (8).
Subsec. (k). Pub. L.
114-113, Div. Q, Sec. 143(a)(4)(A), amended the heading
of subsec. (k) by substituting “January 1, 2016” for “January
1, 2015”.
Subsec. (k). Pub. L.
114-113, Div. Q, Sec. 143(b)(6)(J), amended the heading
of subsec. (k) by substituting “And Before January 1, 2020”
for “And Before January 1, 2016”.
Subsec. (k)(2). Pub.
L. 114-113, Div. Q, Sec. 143(a)(1)(B), amended par. (2)
by substituting “January 1, 2016” for “January 1,
2015” each place it appeared.
Subsec. (k)(2). Pub.
L. 114-113, Div. Q, Sec. 143(b)(1), amended par. (2). Before
amendment, it read as follows:
“(2) Qualified Property.—For purposes
of this subsection—
“(A) In General.—The term ‘qualified
property' means property—
“(i)(I) to which this section applies which
has a recovery period of 20 years or less,
“(II) which is computer software (as defined
in section 167(f)(1)(B)) for which a deduction is allowable under
section 167(a) without regard to this subsection,
“(III) which is water utility property, or
“(IV) which is qualified leasehold improvement
property,
“(ii) the original use of which commences
with the taxpayer after December 31, 2007,
“(iii) which is—
“(I) acquired by the taxpayer after December
31, 2007, and before January 1, 2016, but only if no written binding
contract for the acquisition was in effect before January 1, 2008,
or
“(II) acquired by the taxpayer pursuant to
a written binding contract which was entered into after December 31,
2007, and before January 1, 2016, and
“(iv) which is placed in service by the taxpayer
before January 1, 2016, or, in the case of property described in subparagraph
(B) or (C), before January 1, 2017.
“(B) Certain Property Having Longer Production
Periods Treated As Qualified Property
“(i) In General.—The term ‘qualified
property' includes any property if such property—
“(I) meets the requirements of clauses (i),
(ii), (iii), and (iv) of subparagraph (A),
“(II) has a recovery period of at least 10
years or is transportation property, and
“(III) is subject to section 263A, and
“(IV) meets the requirements of clause (iii)
of section 263A(f)(1)(B) (determined as if such clause also applies
to property which has a long useful life (within the meaning of section
263A(f)))).
“(ii) Only Pre-January 1, 2016, Basis Eligible
For Additional Allowance.—In the case of property which is qualified
property solely by reason of clause (i), paragraph (1) shall apply
only to the extent of the adjusted basis thereof attributable to manufacture,
construction, or production before January 1, 2016.
“(iii) Transportation Property.—For
purposes of this subparagraph, the term ‘transportation property'
means tangible personal property used in the trade or business of
transporting persons or property.
“(iv) Application Of Subparagraph.—This
subparagraph shall not apply to any property which is described in
subparagraph (C).
“(C) Certain Aircraft.—The term ‘qualified
property' includes property—
“(i) which meets the requirements of clauses
(ii), (iii), and (iv) of subparagraph (A),
“(ii) which is an aircraft which is not a
transportation property (as defined in subparagraph (B)(iii)) other
than for agricultural or firefighting purposes,
“(iii) which is purchased and on which such
purchaser, at the time of the contract for purchase, has made a nonrefundable
deposit of the lesser of—
“(I) 10 percent of the cost, or
“(II) $100,000, and
“(iv) which has—
“(I) an estimated production period exceeding
4 months, and
“(II) a cost exceeding $200,000.
“(D) Exceptions.—
“(i) Alternative Depreciation Property.—The
term ‘qualified property' shall not include any property to
which the alternative depreciation system under subsection (g) applies,
determined—
“(I) without regard to paragraph (7) of subsection
(g) (relating to election to have system apply), and
“(II) after application of section 280F(b)
(relating to listed property with limited business use).
“(ii) Qualified New York Liberty Zone Leasehold
Improvement Property.—The term ‘qualified property' shall
not include any qualified New York Liberty Zone leasehold improvement
property (as defined in section 1400L(c)(2)).
“(iii) Election Out.—If a taxpayer
makes an election under this clause with respect to any class of property
for any taxable year, this subsection shall not apply to all property
in such class placed in service during such taxable year.
“(E) Special Rules.—
“(i) Self-Constructed Property.—In
the case of a taxpayer manufacturing, constructing, or producing property
for the taxpayer's own use, the requirements of clause (iii) of subparagraph
(A) shall be treated as met if the taxpayer begins manufacturing,
constructing, or producing the property after December 31, 2007, and
before January 1, 2016.
“(ii) Sale-Leasebacks.—For purposes
of clause (iii) and subparagraph (A)(ii), if property is—
“(I) originally placed in service after December
31, 2007, by a person, and
“(II) sold and leased back by such person
within 3 months after the date such property was originally placed
in service,
“such property shall be treated as originally
placed in service not earlier than the date on which such property
is used under the leaseback referred to in subclause (II).
“(iii) Syndication.—For purposes of
subparagraph (A)(ii), if—
“(I) property is originally placed in service
after December 31, 2007, by the lessor of such property,
“(II) such property is sold by such lessor
or any subsequent purchaser within 3 months after the date such property
was originally placed in service (or, in the case of multiple units
of property subject to the same lease, within 3 months after the date
the final unit is placed in service, so long as the period between
the time the first unit is placed in service and the time the last
unit is placed in service does not exceed 12 months), and
“(III) the user of such property after the
last sale during such 3-month period remains the same as when such
property was originally placed in service,
“such property shall be treated as originally
placed in service not earlier than the date of such last sale.
“(iv) Limitations Related To Users And Related
Parties.—The term ‘qualified property' shall not include
any property if—
“(I) the user of such property (as of the
date on which such property is originally placed in service) or a
person which is related (within the meaning of section 267(b) or 707(b))
to such user or to the taxpayer had a written binding contract in
effect for the acquisition of such property at any time on or before
December 31, 2007, or
“(II) in the case of property manufactured,
constructed, or produced for such user's or person's own use, the
manufacture, construction, or production of such property began at
any time on or before December 31, 2007.
“(F) Coordination With Section 280F.—For
purposes of section 280F—
“(i) Automobiles.—In the case of a
passenger automobile (as defined in section 280F(d)(5)) which is qualified
property, the Secretary shall increase the limitation under section
280F(a)(1)(A)(i) by $8,000.
“(ii) Listed Property.—The deduction
allowable under paragraph (1) shall be taken into account in computing
any recapture amount under section 280F(b)(2).
“(G) Deduction Allowed In Computing Minimum
Tax.—For purposes of determining alternative minimum taxable
income under section 55, the deduction under subsection (a) for qualified
property shall be determined under this section without regard to
any adjustment under section 56.”
Subsec. (k)(2)(A)(iv). Pub.
L. 114-113, Div. Q, Sec. 143(a)(1)(A), amended clause (iv)
by substituting “January 1, 2017” for “January 1,
2016”.
Subsec. (k)(2)(B)(ii). Pub.
L. 114-113, Div. Q, Sec. 143(a)(4)(B), amended the heading
of clause (ii) by substituting “pre-January 1, 2016” for “pre-January
1, 2015”.
Subsec. (k)(3). Pub.
L. 114-113, Div. Q, Sec. 143(b)(2), amended par. (3). Before
being amended, it read as follows:
“(3) Qualified Leasehold Improvement Property.—For
purposes of this subsection—
“(A) In General.—The term ‘qualified
leasehold improvement property' means any improvement to an interior
portion of a building which is nonresidential real property if—
“(i) such improvement is made under or pursuant
to a lease (as defined in subsection (h)(7))—
“(I) by the lessee (or any sublessee) of
such portion, or
“(II) by the lessor of such portion,
“(ii) such portion is to be occupied exclusively
by the lessee (or any sublessee) of such portion, and
“(iii) such improvement is placed in service
more than 3 years after the date the building was first placed in
service.
“(B) Certain Improvements Not Included.—Such
term shall not include any improvement for which the expenditure is
attributable to—
“(i) the enlargement of the building,
“(ii) any elevator or escalator,
“(iii) any structural component benefiting
a common area, and
“(iv) the internal structural framework of
the building.
“(C) Definitions And Special Rules.—For
purposes of this paragraph—
“(i) Commitment To Lease Treated As Lease.—A
commitment to enter into a lease shall be treated as a lease, and
the parties to such commitment shall be treated as lessor and lessee,
respectively.
“(ii) Related Persons.—A lease between
related persons shall not be considered a lease.
“For purposes of the preceding sentence,
the term “related persons” means—
“(I) members of an affiliated group (as defined
in section 1504), and
“(II) persons having a relationship described
in subsection (b) of section 267; except that, for purposes of this
clause, the phrase ‘80 percent or more’ shall be substituted
for the phrase “more than 50 percent” each place it appears
in such subsection.”
Subsec. (k)(4)(D)(iii)(II). Pub.
L. 114-113, Div. Q, Sec. 143(a)(3)(A), amended subclause
(II) by substituting “January 1, 2016” for “January
1, 2015”.
Subsec. (k)(4)(L). Pub.
L. 114-113, Div. Q, Sec. 143(a)(3)(B), added subpar. (L).
Subsec. (k)(4). Pub.
L. 114-113, Div. Q, Sec. 143(b)(3), amended par. (4) (as
amended by Act Sec. 143(a)). Before amendment, it read as follows:
“(4) Election To Accelerate The AMT And Research
Credits In Lieu Of Bonus Depreciation.—
“(A) In General.—If a corporation elects
to have this paragraph apply for the first taxable year of the taxpayer
ending after March 31, 2008, in the case of such taxable year and
each subsequent taxable year—
“(i) paragraph (1) shall not apply to any
eligible qualified property placed in service by the taxpayer,
“(ii) the applicable depreciation method
used under this section with respect to such property shall be the
straight line method, and
“(iii) each of the limitations described
in subparagraph (B) for any such taxable year shall be increased by
the bonus depreciation amount which is—
“(I) determined for such taxable year under
subparagraph (C), and
“(II) allocated to such limitation under
subparagraph (E).
“(B) Limitations To Be Increased.—The
limitations described in this subparagraph are—
“(i) the limitation imposed by section 38(c),
and
“(ii) the limitation imposed by section 53(c).
“(C) Bonus Depreciation Amount.—For
purposes of this paragraph—
“(i) In General.—The bonus depreciation
amount for any taxable year is an amount equal to 20 percent of the
excess (if any) of—
“(I) the aggregate amount of depreciation
which would be allowed under this section for eligible qualified property
placed in service by the taxpayer during such taxable year if paragraph
(1) applied to all such property, over
“(II) the aggregate amount of depreciation
which would be allowed under this section for eligible qualified property
placed in service by the taxpayer during such taxable year if paragraph
(1) did not apply to any such property.
“The aggregate amounts determined under subclauses
(I) and (II) shall be determined without regard to any election made
under subsection (b)(2)(D), (b)(3)(D), or (g)(7) and without regard
to subparagraph (A)(ii).
“(ii) Maximum Amount.—The bonus depreciation
amount for any taxable year shall not exceed the maximum increase
amount under clause (iii), reduced (but not below zero) by the sum
of the bonus depreciation amounts for all preceding taxable years.
“(iii) Maximum Increase Amount.—For
purposes of clause (ii), the term ‘maximum increase amount’
means, with respect to any corporation, the lesser of—
“(I) $30,000,000, or
“(II) 6 percent of the sum of the business
credit increase amount, and the AMT credit increase amount, determined
with respect to such corporation under subparagraph (E).
“(iv) Aggregation Rule.—All corporations
which are treated as a single employer under section 52(a) shall be
treated—
“(I) as 1 taxpayer for purposes of this paragraph,
and
“(II) as having elected the application of
this paragraph if any such corporation so elects.
“(D) Eligible Qualified Property.—For
purposes of this paragraph, the term ‘eligible qualified property'
means qualified property under paragraph (2), except that in applying
paragraph (2) for purposes of this paragraph—
“(i) ‘March 31, 2008' shall be substituted
for ‘December 31, 2007' each place it appears in subparagraph
(A) and clauses (i) and (ii) of subparagraph (E) thereof,
“(ii) ‘April 1, 2008' shall be substituted
for ‘January 1, 2008' in subparagraph (A)(iii)(I) thereof, and
“(iii) only adjusted basis attributable to
manufacture, construction, or production—
“(I) after March 31, 2008, and before January
1, 2010, and
“(II) after December 31, 2010, and before
January 1, 2016, shall be taken into account under subparagraph (B)(ii)
thereof.
“(E) Allocation Of Bonus Depreciation Amounts.—
“(i) In General.—Subject to clauses
(ii) and (iii), the taxpayer shall, at such time and in such manner
as the Secretary may prescribe, specify the portion (if any) of the
bonus depreciation amount for the taxable year which is to be allocated
to each of the limitations described in subparagraph (B) for such
taxable year.
“(ii) Limitation On Allocations.—The
portion of the bonus depreciation amount which may be allocated under
clause (i) to the limitations described in subparagraph (B) for any
taxable year shall not exceed—
“(I) in the case of the limitation described
in subparagraph (B)(i), the excess of the business credit increase
amount over the bonus depreciation amount allocated to such limitation
for all preceding taxable years, and
“(II) in the case of the limitation described
in subparagraph (B)(ii), the excess of the AMT credit increase amount
over the bonus depreciation amount allocated to such limitation for
all preceding taxable years.
“(iii) Business Credit Increase Amount.—For
purposes of this paragraph, the term ‘business credit increase
amount' means the amount equal to the portion of the credit allowable
under section 38 (determined without regard to subsection (c) thereof)
for the first taxable year ending after March 31, 2008, which is allocable
to business credit carryforwards to such taxable year which are—
“(I) from taxable years beginning before
January 1, 2006, and
“(II) properly allocable (determined under
the rules of section 38(d)) to the research credit determined under
section 41(a).
“(iv) AMT Credit Increase Amount.—For
purposes of this paragraph, the term ‘AMT credit increase amount'
means the amount equal to the portion of the minimum tax credit under
section 53(b) for the first taxable year ending after March 31, 2008,
determined by taking into account only the adjusted net minimum tax
for taxable years beginning before January 1, 2006. For purposes of
the preceding sentence, credits shall be treated as allowed on a first-in,
first-out basis.
“(F) Credit Refundable.—For purposes
of section 6401(b), the aggregate increase in the credits allowable
under part IV of subchapter A for any taxable year resulting from
the application of this paragraph shall be treated as allowed under
subpart C of such part (and not any other subpart).
“(G) Other Rules.—
“(i) Election.—Any election under this
paragraph (including any allocation under subparagraph (E)) may be
revoked only with the consent of the Secretary.
“(ii) Partnerships With Electing Partners.—In
the case of a corporation making an election under subparagraph (A)
and which is a partner in a partnership, for purposes of determining
such corporation's distributive share of partnership items under section
702—
“(I) paragraph (1) shall not apply to any
eligible qualified property, and
“(II) the applicable depreciation method
used under this section with respect to such property shall be the
straight line method.
“(iii) Special Rule For Passenger Aircraft.—In
the case of any passenger aircraft, the written binding contract limitation
under paragraph (2)(A)(iii)(I) shall not apply for purposes of subparagraphs
(C)(i)(I) and (D).
“(H) Special Rules For Extension Property.—
“(i) Taxpayers Previously Electing Acceleration.—In
the case of a taxpayer who made the election under subparagraph (A)
for its first taxable year ending after March 31, 2008—
“(I) the taxpayer may elect not to have this
paragraph apply to extension property, but
“(II) if the taxpayer does not make the election
under subclause (I), in applying this paragraph to the taxpayer a
separate bonus depreciation amount, maximum amount, and maximum increase
amount shall be computed and applied to eligible qualified property
which is extension property and to eligible qualified property which
is not extension property.
“(ii) Taxpayers Not Previously Electing Acceleration.—In
the case of a taxpayer who did not make the election under subparagraph
(A) for its first taxable year ending after March 31, 2008—
“(I) the taxpayer may elect to have this
paragraph apply to its first taxable year ending after December 31,
2008, and each subsequent taxable year, and
“(II) if the taxpayer makes the election
under subclause (I), this paragraph shall only apply to eligible qualified
property which is extension property.
“(iii) Extension Property.—For purposes
of this subparagraph, the term ‘extension property' means property
which is eligible qualified property solely by reason of the extension
of the application of the special allowance under paragraph (1) pursuant
to the amendments made by section 1201(a) of the American Recovery
and Reinvestment Tax Act of 2009 (and the application of such extension
to this paragraph pursuant to the amendment made by section 1201(b)(1)
of such Act).
“(I) Special Rules For Round 2 Extension
Property.—
“(i) In General.—In the case of round
2 extension property, this paragraph shall be applied without regard
to—
“(I) the limitation described in subparagraph
(B)(i) thereof, and
“(II) the business credit increase amount
under subparagraph (E)(iii) thereof.
“(ii) Taxpayers Previously Electing Acceleration.—In
the case of a taxpayer who made the election under subparagraph (A)
for its first taxable year ending after March 31, 2008, or a taxpayer
who made the election under subparagraph (H)(ii) for its first taxable
year ending after December 31, 2008—
“(I) the taxpayer may elect not to have this
paragraph apply to round 2 extension property, but
“(II) if the taxpayer does not make the election
under subclause (I), in applying this paragraph to the taxpayer the
bonus depreciation amount, maximum amount, and maximum increase amount
shall be computed and applied to eligible qualified property which
is round 2 extension property.
“The amounts described in subclause (II)
shall be computed separately from any amounts computed with respect
to eligible qualified property which is not round 2 extension property.
“(iii) Taxpayers Not Previously Electing
Acceleration.—In the case of a taxpayer who neither made the
election under subparagraph (A) for its first taxable year ending
after March 31, 2008, nor made the election under subparagraph (H)(ii)
for its first taxable year ending after December 31, 2008—
“(I) the taxpayer may elect to have this
paragraph apply to its first taxable year ending after December 31,
2010, and each subsequent taxable year, and
“(II) if the taxpayer makes the election
under subclause (I), this paragraph shall only apply to eligible qualified
property which is round 2 extension property.
“(iv) Round 2 Extension Property.—For
purposes of this subparagraph, the term ‘round 2 extension property'
means property which is eligible qualified property solely by reason
of the extension of the application of the special allowance under
paragraph (1) pursuant to the amendments made by section 401(a) of
the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation
Act of 2010 (and the application of such extension to this paragraph
pursuant to the amendment made by section 401(c)(1) of such Act).
“(J) Special Rules For Round 3 Extension
Property.—
“(i) In General.—In the case of round
3 extension property, this paragraph shall be applied without regard
to—
“(I) the limitation described in subparagraph
(B)(i) thereof, and
“(II) the business credit increase amount
under subparagraph (E)(iii) thereof.
“(ii) Taxpayers Previously Electing Acceleration.—In
the case of a taxpayer who made the election under subparagraph (A)
for its first taxable year ending after March 31, 2008, a taxpayer
who made the election under subparagraph (H)(ii) for its first taxable
year ending after December 31, 2008, or a taxpayer who made the election
under subparagraph (I)(iii) for its first taxable year ending after
December 31, 2010—
“(I) the taxpayer may elect not to have this
paragraph apply to round 3 extension property, but
“(II) if the taxpayer does not make the election
under subclause (I), in applying this paragraph to the taxpayer the
bonus depreciation amount, maximum amount, and maximum increase amount
shall be computed and applied to eligible qualified property which
is round 3 extension property.
“The amounts described in subclause (II)
shall be computed separately from any amounts computed with respect
to eligible qualified property which is not round 3 extension property.
“(iii) Taxpayers Not Previously Electing
Acceleration.—In the case of a taxpayer who neither made the
election under subparagraph (A) for its first taxable year ending
after March 31, 2008, nor made the election under subparagraph (H)(ii)
for its first taxable year ending after December 31, 2008, nor made
the election under subparagraph (I)(iii) for its first taxable year
ending after December 31, 2010—
“(I) the taxpayer may elect to have this
paragraph apply to its first taxable year ending after December 31,
2012, and each subsequent taxable year, and
“(II) if the taxpayer makes the election
under subclause (I), this paragraph shall only apply to eligible qualified
property which is round 3 extension property.
“(iv) Round 3 Extension Property.—For
purposes of this subparagraph, the term ‘round 3 extension property’
means property which is eligible qualified property solely by reason
of the extension of the application of the special allowance under
paragraph (1) pursuant to the amendments made by section 331(a) of
the American Taxpayer Relief Act of 2012 (and the application of such
extension to this paragraph pursuant to the amendment made by section
331(c)(1) of such Act).
“(K) Special Rules For Round 4 Extension
Property.—
“(i) In General.—In the case of round
4 extension property, in applying this paragraph to any taxpayer—
“(I) the limitation described in subparagraph
(B)(i) and the business credit increase amount under subparagraph
(E)(iii) thereof shall not apply, and
“(II) the bonus depreciation amount, maximum
amount, and maximum increase amount shall be computed separately from
amounts computed with respect to eligible qualified property which
is not round 4 extension property.
“(ii) Election.—
“(I) A taxpayer who has an election in effect
under this paragraph for round 3 extension property shall be treated
as having an election in effect for round 4 extension property unless
the taxpayer elects to not have this paragraph apply to round 4 extension
property.
“(II) A taxpayer who does not have an election
in effect under this paragraph for round 3 extension property may
elect to have this paragraph apply to round 4 extension property.
“(iii) Round 4 Extension Property.—For
purposes of this subparagraph, the term “round 4 extension property”
means property which is eligible qualified property solely by reason
of the extension of the application of the special allowance under
paragraph (1) pursuant to the amendments made by section 125(a) of
the Tax Increase Prevention Act of 2014 (and the application of such
extension to this paragraph pursuant to the amendment made by section
125(c) of such Act).
“(L) Special Rules For Round 5 Extension
Property.—
“(i) In General.—In the case of round
5 extension property, in applying this paragraph to any taxpayer—
“(I) the limitation described in subparagraph
(B)(i) and the business credit increase amount under subparagraph
(E)(iii) thereof shall not apply, and
“(II) the bonus depreciation amount, maximum
amount, and maximum increase amount shall be computed separately from
amounts computed with respect to eligible qualified property which
is not round 5 extension property.
“(ii) Election.—
“(I) A taxpayer who has an election in effect
under this paragraph for round 4 extension property shall be treated
as having an election in effect for round 5 extension property unless
the taxpayer elects to not have this paragraph apply to round 5 extension
property.
“(II) A taxpayer who does not have an election
in effect under this paragraph for round 4 extension property may
elect to have this paragraph apply to round 5 extension property.
“(iii) Round 5 Extension Property.—For
purposes of this subparagraph, the term ‘round 5 extension property’
means property which is eligible qualified property solely by reason
of the extension of the application of the special allowance under
paragraph (1) pursuant to the amendments made by section 143(a)(1)
of the Protecting Americans from Tax Hikes Act of 2015 (and the application
of such extension to this paragraph pursuant to the amendment made
by section 143(a)(3) of such Act).”
Subsec. (k)(5). Pub.
L. 114-113, Div. Q, Sec. 143(b)(4)(A), struck par. (5).
Before being struck, it read as follows:
“(5) Special Rule For Property Acquired During
Certain Pre-2012 Periods.—In the case of qualified property
acquired by the taxpayer (under rules similar to the rules of clauses
(ii) and (iii) of paragraph (2)(A)) after September 8, 2010, and before
January 1, 2012, and which is placed in service by the taxpayer before
January 1, 2012 (January 1, 2013, in the case of property described
in subparagraph (2)(B) or (2)(C)), paragraph (1)(A) shall be applied
by substituting ‘100 percent' for ‘50 percent'.”
Subsec. (k)(5). Pub.
L. 114-113, Div. Q, Sec. 143(b)(4)(B), added a new par.
(5).
Subsec. (k)(6). Pub.
L. 114-113, Div. Q, Sec. 143(b)(5), added par. (6).
Subsec. (k)(7). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(D), added par. (7).
Subsec. (l)(2)(D). Pub.
L. 114-113, Div. Q, Sec. 189(a), amended subpar. (D)
Subsec. (l)(3)(A). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(E)(i), amended subpar.
(A) by substituting “subsection “(k)” for “section
168(k)”.
Subsec. (l)(3)(B). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(E)(ii), amended subpar.
(B) by substituting “subsection (k)(2)(D)” for “section
168(k)(2)(D)(i)”.
Subsec. (l)(4). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(F), amended par. (4)
by substituting “subsection (k)(2)(E) shall apply.” for “subparagraph
(E) of section 168(k)(2) shall apply, except that such subparagraph
shall be applied—(A) by substituting ‘the date of the
enactment of subsection (l)' for ‘December 31, 2007' each place
it appears therein, and (B) by substituting ‘qualified second
generation biofuel plant property' for ‘qualified property'
in clause (iv) thereof.”
Subsec. (l)(5). Pub.
L. 114-113, Div. Q, Sec. 143(b)(6)(G), amended par. (5)
by substituting “subsection (k)(2)(G)” for “section
168(k)(2)(G)”.
2014 — Subsec. (b)(5). Pub. L. 113-295, Div. A, Sec. 210(g)(2)(A),
amended par. (5) by substituting “(2)(D)” for “(2)(C)”.
Subsec. (e)(3)(A)(i)(I). Pub.
L. 113-295, Div. A, Sec. 121(a)(1), amended subclause (I)
by substituting “January 1, 2015” for “January 1,
2014”.
Subsec. (e)(3)(A)(i)(II). Pub.
L. 113-295, Div. A, Sec. 121(a)(2), amended subclause (II)
by substituting “December 31, 2014” for “December
31, 2013”.
Subsec. (e)(3)(E)(iv). Pub.
L. 113-295, Div. A, Sec. 122(a), amended clause (iv) by
substituting “January 1, 2015” for “January 1, 2014”.
Subsec. (e)(3)(E)(v). Pub.
L. 113-295, Div. A, Sec. 122(a), amended clause (v) by substituting “January
1, 2015” for “January 1, 2014”.
Subsec. (e)(3)(E)(ix). Pub.
L. 113-295, Div. A, Sec. 122(a), amended clause (ix) by
substituting “January 1, 2015” for “January 1, 2014”.
Subsec. (e)(7)(B). Pub.
L. 113-295, Div. A, Sec. 211(b), amended subpar. (B) by
inserting “which is not qualified leasehold improvement property”
after “Property described in this paragraph”.
Subsec. (e)(8)(D). Pub.
L. 113-295, Div. A, Sec. 211(b), amended subpar. (D) by
inserting “which is not qualified leasehold improvement property”
after “Property described in this paragraph”.
Subsec. (i)(15)(D). Pub.
L. 113-295, Div. A, Sec. 123(a), amended subpar. (D) by
substituting “December 31, 2014” for “December 31,
2013”.
Subsec. (i)(18)(A)(ii). Pub.. L. 113-295, Div.
A, Sec. 210(c)(1), amended clause (ii) by substituting “16 years”
for “10 years”.
Subsec. (i)(19)(A)(ii). Pub.
L. 113-295, Div. A, Sec. 210(c)(2), amended clause (ii)
by substituting “16 years” for “10 years”.
Subsec. (j)(8). Pub.
L. 113-295, Div. A, Sec. 124(a), amended par. (8) by substituting “December
31, 2014” for “December 31, 2013”.
Subsec. (k). Pub. L.
113-295, Div. A, Sec. 125(d)(1), amended the heading of
subsec. (k) by substituting “January 1, 2015” for “January
1, 2014”.
Subsec. (k)(2). Pub.
L. 113-295, Div. A, Sec. 125(a)(2), amended par. (2) by
substituting “January 1, 2015” for “January 1, 2014”
each place it appeared.
Subsec. (k)(2)(A)(iv). Pub.
L. 113-295, Div. A, Sec. 125(a)(1), amended clause (iv)
by substituting “January 1, 2016” for “January 1,
2015”.
Subsec. (k)(2)(B)(i)(IV). Pub.
L. 113-295, Div. A, Sec. 214(b), amended subclause (IV)
by substituting “clause also applies” for “clauses
also apply”.
Subsec. (k)(2)(B)(ii). Pub.
L. 113-295, Div. A, Sec. 125(d)(2), amended the heading
of clause (ii) by substituting “Pre-January 1, 2015” for “Pre-January
1, 2014”.
Subsec. (k)(4)(C)(i). Pub.
L. 113-295, Div. A, Sec. 210(g)(2)(B), amended clause (i)
by substituting “(b)(2)(D)” for “(b)(2)(C)”.
Subsec. (k)(4)(D)(iii)(II). Pub.
L. 113-295, Div. A, Sec. 125(c)(1), amended subclause (II)
by substituting “January 1, 2015” for “January 1,
2014”.
Subsec. (k)(4)(E)(iv). Pub.
L. 113-295, Div. A, Sec. 212(b), amended clause (iv) by
substituting “adjusted net minimum tax” for “adjusted
minimum tax”.
Subsec. (k)(4)(J)(iii). Pub.
L. 113-295, Div. A, Sec. 202(e), amended clause (iii) by
substituitng “its first taxable year” for “any taxable
year”.
Subsec. (k)(4)(K). Pub.
L. 113-295, Div. A, Sec. 125(c)(2), amended par. (4) by
adding subsec. (K).
Subsec. (l)(2)(D). Pub.
L. 113-295, Div. A, Sec. 157(a), amended subpar. (D) by
substituting “January 1, 2015” for “January 1, 2014”.
Subsec. (m)(2)(B)(i). Pub.
L. 113-295, Div. A, Sec. 210(d), amended clause (i) by substituting “subsection
(k) (determined without regard to paragraph (4) thereof” for “section
168(k)”.
Subsec. (n)(2)(C). Pub.
L. 113-295, Div. A, Sec. 125(d)(3), amended subpar. (C)
by substituting “January 1, 2015” for “January 1,
2014”.
2013 — Subsec. (e)(3)(E)(iv). Pub. L. 112-240, Sec. 311(a), amended
clause (iv) by substituting “January 1, 2014” for “January
1, 2012”.
Subsec. (e)(3)(E)(v). Pub. L. 112-240, Sec. 311(a), amended
clause (v) by substituting “January 1, 2014” for “January
1, 2012”.
Subsec. (e)(3)(E)(ix). Pub. L. 112-240, Sec. 311(a), amended
clause (ix) by substituting “January 1, 2014” for “January
1, 2012”.
Subsec. (i)(9)(A)(ii). Pub. L. 112-240, Sec. 331(d), amended
clause (ii) by inserting “(respecting all elections made by
the taxpayer under this section)” after “such property”.
Subsec. (i)(15)(D). Pub.
L. 112-240, Sec. 312(a), amended subpar (D) by substituting “December
31, 2013” for “December 31, 2011”.
Subsec. (j)(8). Pub.
L. 112-240, Sec. 313(a), amended par. (8) by substituting “December
31, 2013” for “December 31, 2011”.
Subsec. (k). Pub.
L. 112-240, Sec. 331(e)(1), amended the heading for subsec.
(k) by substituting “January 1, 2014” for “January
1, 2013”.
Subsec. (k)(2). Pub.
L. 112-240, Sec. 331(a)(2), amended par. (2) by substituting “January
1, 2014” for “January 1, 2013” each place it appeared.
Subsec. (k)(2)(A)(iv). Pub. L. 112-240, Sec. 331(a)(1),
amended clause (iv) by substituting “January 1, 2015”
for “January 1, 2014”.
Subsec. (k)(2)(B)(ii). Pub. L. 112-240, Sec. 331(e)(2),
amended the heading for clause (ii) by substituting “Pre-January
1, 2014” for “Pre-January 1, 2013”.
Subsec. (k)(4)(D)(iii)(II). Pub. L. 112-240, Sec. 331(c)(1),
amended subclause (II) by substituting “2014” for “2013”.
Subsec. (k)(4)(J). Pub. L. 112-240, Sec. 331(c)(2),
added subpar. (J).
Subsec. (l). Pub.L.
112-240, Sec. 410(b)(2)(C). amended the heading for subsec.
(l) by substituting “Second Generation” for “Cellulosic”.
Subsec. (l). Pub.
L. 112-240, Sec. 410(b)(2)(A), amended subsec. (l) by substituting “second
generation biofuel” for “cellulosic biofuel” each
place it appeared.
Subsec. (l)(2). Pub. L. 112-240, Sec. 410(b)(2)(D),
amended the heading for par. (2) by substituting “Second Generation”
for “Cellulosic”.
Subsec. (l)(2)(A). Pub. L. 112-240, Sec. 410(b)(1),
amended subpar. (A) by substituting “solely to produce second
generation biofuel (as defined in section 40(b)(6)(E))” for “solely
to produce cellulosic biofuel”.
Subsec. (l)(2)(D). Pub. L. 112-240, Sec. 410(a)(1),
amended subpar. (D) by substituting “January 1, 2014”
for “January 1, 2013”.
Subsec. (l)(3). Pub. L. 112-240, Sec. 410(b)(2)(B),
struck par. (3). Before being struck, it read as follows:
“(3) Cellulosic Biofuel.—The term ‘cellulosic
biofuel' means any liquid fuel which is produced from any lignocellulosic
or hemicellulosic matter that is available on a renewable or recurring
basis.”
Subsec. (l)(4)–(8). Pub. L. 112-240, Sec. 410(b)(2)(B),
amended subsec. (l) by redesignating par. (4)–(8) as par. (3)–(7),
respectively.
Subsec. (n)(2)(C). Pub. L. 112-240, Sec. 331(e)(3),
amended par. (2) by substituting “January 1, 2014” for “January
1, 2013”.
2010 — Subsec. (e)(3)(E)(iv). Pub. L. 111-312, Sec. 737(a), amended
clause (iv) by substituting “January 1, 2012” for “January
1, 2010”.
Subsec. (e)(3)(E)(v). Pub. L. 111-312, Sec. 737(a), amended
clause (v) by substituting “January 1, 2012” for “January
1, 2010”.
Subsec. (e)(3)(E)(ix). Pub. L. 111-312, Sec. 737(a), amended
clause (ix) by substituting “January 1, 2012” for “January
1, 2010”.
Subsec. (e)(7)(A)(i). Pub. L. 111-312, Sec. 737(b)(1),
amended clause (i) by striking “if such building is placed in
service after December 31, 2008, and before January 1, 2010,”
after “building,”.
Subsec. (e)(8)(E). Pub. L. 111-312, Sec. 737(b)(2),
amended par. (8) by striking subpar. (E). Before being struck, it
read as follows:
“(E) Termination.—Such term shall not
include any improvement placed in service after December 31, 2009.”
Subsec. (i)(15)(D). Pub.
L. 111-312, Sec. 738(a), amended subpar. (D) by substituting “December
31, 2011” for “December 31, 2009”.
Subsec. (j)(8). Pub.
L. 111-312, Sec. 739(a), amended par. (8) by substituting “December
31, 2011” for “December 31, 2009”.
Subsec. (k). Pub.
L. 111-312, Sec. 401(d)(1), amended the heading of subsec.
(k) by substituting “January 1, 2013” for “January
1, 2011”.
Subsec. (k)(2). Pub.
L. 111-312, Sec. 401(a)(2), amended par. (2) by substituting “January
1, 2013” for “January 1, 2011” each place it appeared.
Subsec. (k)(2)(A)(iv). Pub. L. 111-312, Sec. 401(a)(1),
amended clause (iv) by substituting “January 1, 2014”
for “January 1, 2012”.
Subsec. (k)(2)(B)(ii). Pub. L. 111-312, Sec. 401(d)(2),
amended the heading for clause (ii) by substituting “Pre-January
1, 2013” for “Pre-January 1, 2011”.
Subsec. (k)(4)(D)(ii). Pub. L. 111-312, Sec. 401(d)(3)(B),
amended clause (ii) by inserting “and” at the end.
Subsec. (k)(4)(D)(iii). Pub. L. 111-312, Sec. 401(c)(1),
amended clause (iii) by substituting “or production—”
for “or production after March 31, 2008, and before January
1, 2010, shall be taken into account under subparagraph (B)(ii) thereof.”
Subsec. (k)(4)(D)(iii). Pub. L. 111-312, Sec. 401(d)(3)(C),
amended clause (iii) by substituting a period for the comma at the
end.
Subsec. (k)(4)(D)(iv)–(v). Pub. L. 111-312, Sec. 401(d)(3)(A),
amended subpar. (D) by striking clauses (iv) and (v). Before being
struck, they read as follows:
“(iv) ‘January 1, 2011' shall be substituted
for ‘January 1, 2012' in subparagraph (A)(iv) thereof, and
“(v) ‘January 1, 2010' shall be substituted
for ‘January 1, 2011' each place it appears in subparagraph
(A) thereof.”
Subsec. (k)(4)(I). Pub. L. 111-312, Sec. 401(c)(2),
amended par. (4) by adding subpar. (I).
Subsec. (k)(5). Pub.
L. 111-312, Sec. 401(b), amended subsec. (k) by adding par.
(5).
Subsec. (l)(5)(A)–(C). Pub. L. 111-312, Sec. 401(d)(4),
amended par. (5) by inserting “and” at the end of subpar.
(A); by striking subpar. (B); and by redesignating subpar. (C) as
subpar. (B). Before being struck, subpar. (B) read as follows:
“(B) by substituting “January 1, 2013”
for “January 1, 2011” in clause (i) thereof, and”.
Subsec. (n)(2)(C). Pub. L. 111-312, Sec. 401(d)(5),
amended subpar. (C) by substituting “January 1, 2013”
for “January 1, 2011”.
Subsec. (k). Pub.
L. 111-240, Sec. 2022(b)(1), amended the heading of subsec.
(k) by substituting “January 1, 2011” for “January
1, 2010”.
Subsec. (k)(2). Pub.
L. 111-240, Sec. 2022(a)(2), amended par. (2) by substituting “January
1, 2011” for “January 1, 2010” each place it appeared.
Subsec. (k)(2)(A)(iv). Pub. L. 111-240, Sec. 2022(a)(1),
amended par. (2) by substituting “January 1, 2012” for “January
1, 2011”.
Subsec. (k)(2)(B)(ii). Pub. L. 111-240, Sec. 2022(b)(2),
amended the heading of clause (ii) by substituting “Pre-January
1, 2011” for “Pre-January 1, 2010”.
Subsec. (k)(4)(D)(ii)–(v). Pub. L. 111-240, Sec. 2022(b)(3),
amended subpar. (D) by striking “and” at the end of clause
(ii), by substituting “and” for the period at the end
of clause (iii), and by adding new clauses (iv) and (v).
Subsec. (l)(5)(B). Pub. L. 111-240, Sec. 2022(b)(4),
amended subpar. (B) by substituting “January 1, 2011”
for “January 1, 2010”.
Subsec. (n)(2)(C). Pub. L. 111-240, Sec. 2022(b)(5),
amended subpar. (C) by substituting “January 1, 2011”
for “January 1, 2010”.
2009 — Subsec. (k). Pub. L. 111-5, Div. B, Sec. 1201(a)(2)(A),
amended the heading of subsec. (k) by substituting “January
1, 2010” for “January 1, 2009”.
Subsec. (k)(2). Pub. L.
111-5, Div. B, Sec. 1201(a)(1), amended par. (2) by substituting “January
1, 2011” for “January 1, 2010” and by substituting “January
1, 2010” for “January 1, 2009” each place it appeared.
Subsec. (k)(2)(B)(ii). Pub.
L. 111-5, Div. B, Sec. 1201(a)(2)(B), amended the heading
of clause (ii) by substituting “Pre-January 1, 2010” for “Pre-January
1, 2009”.
Subsec. (k)(4)(D)(i)–(iii). Pub. L. 111-5, Div. B, Sec. 1201(a)(3)(A)(i),
amended subpar. (D) by striking “and” at the end of clause
(i), by redesignating clause (ii) as clause (iii), and by adding a
new clause (ii).
Subsec. (k)(4)(D)(iii). Pub.
L. 111-5, Div. B, Sec. 1201(b)(1)(A), amended clause (iii),
as redesignated, by substituting “2010” for “2009”.
Subsec. (k)(4)(H). Pub.
L. 111-5, Div. B, Sec. 1201(b)(1)(B), amended par. (4) by
adding subpar. (H).
Subsec. (l)(5)(B). Pub.
L. 111-5, Div. B, Sec. 1201(a)(2)(C), amended subpar. (B)
by substituting “January 1, 2010” for “January 1,
2009”.
Subsec. (n)(2)(C). Pub.
L. 111-5, Div. B, Sec. 1201(a)(2)(D), amended subpar. (C)
by substituting “January 1, 2010” for “January 1,
2009”.
2008 — Subsec. (b)(2)(B)–(D). Pub. L. 110-343, Div. B, Sec. 306(c), amended
par. (2) by striking “and” at the end of subpar. (B),
by redesignating subpar. (C) as subpar. (D), and by adding subpar.
(C).
Subsec. (b)(3)(I). Pub.
L. 110-343, Div. C, Sec. 305(c)(3), amended par. (3) by
adding subpar. (I).
Subsec. (e)(3)(B)(v). Pub.
L. 110-343, Div. C, Sec. 505(a), amended clause (v) by striking “and”
at the end.
Subsec. (e)(3)(B)(vi)(III). Pub.
L. 110-343, Div. C, Sec. 505(a), amended subclause (III)
by substituting “, and” for the period at the end.
Subsec. (e)(3)(B)(vii). Pub.
L. 110-343, Div. C, Sec. 505(a), amended subpar. (B) by
adding clause (vii).
Subsec. (e)(3)(D)(i)–(iv). Pub. L. 110-343, Div. B, Sec. 306(a), amended
subpar. (D) by striking “and” at the end of clause (i),
by substituting a comma for the period at the end of clause (ii),
and by adding clause (iii) and (iv)
Subsec. (e)(3)(E)(iv)–(v). Pub. L. 110-343, Div. C, Sec. 305(a)(1),
amended clauses (iv) and (v) by substituting “January 1, 2010”
for “January 1, 2008”.
Subsec. (e)(3)(E)(vii)–(ix). Pub. L. 110-343, Div. C, Sec. 305(c)(1),
amended subpar. (E) by striking “and” at the end of clause
(vii), by substituting “, and” for the period at the end
of clause (viii), and by adding clause (ix).
Subsec. (e)(7). Pub.
L. 110-343, Div. C, Sec. 305(b)(1), amended par. (7). Before
amendment, it read as follows:
“(7) Qualified Restaurant Property.—
The term ‘qualified restaurant property' means any section 1250
property which is an improvement to a building if—
“(A) such improvement is placed in service
more than 3 years after the date such building was first placed in
service, and
“(B) more than 50 percent of the building's
square footage is devoted to preparation of, and seating for on-premises
consumption of, prepared meals.”
Subsec. (e)(8). Pub.
L. 110-343, Div. C, Sec. 305(c)(2), amended subsec. (e)
by adding par. (8).
Subsec. (g)(3)(B). Pub.
L. 110-343, Div. C, Sec. 305(c)(4), amended subpar. (B)
by inserting the entry for “(E)(ix)”.
Subsec. (g)(3)(B). Pub.
L. 110-343, Div. C, Sec. 505(b), amended subpar. (B) by
inserting the entry for “(B)(vii)”.
Subsec. (i)(15)(D). Pub.
L. 110-343, Div. C, Sec. 317(a), amended subpar. (D) by
substituting “December 31, 2009” for “December 31,
2007”.
Subsec. (i)(18). Pub.
L. 110-343, Div. B, Sec. 306(b), amended subsec. (i) by
adding par. (18).
Subsec. (i)(19). Pub.
L. 110-343, Div. B, Sec. 306(b), amended subsec. (i) by
adding par. (19).
Subsec. (j)(8). Pub.
L. 110-343, Div. C, Sec. 315(a), amended par. (8) by substituting “2009”
for “2007”.
Subsec. (l). Pub. L.
110-343, Div. B, Sec. 201(b)(1)–(3), amended subsec.
(l) by substituting “cellulosic biofuel” for “cellulosic
biomass ethanol” each place it appeared, including the headings
for sec. (l) and sec. (l)(2).
Subsec. (l)(3). Pub.
L. 110-343, Div. B, Sec. 201(a), amended par. (3). Before
amendment it read as follows:
“(3) Cellulosic Biomass Ethanol.—For
purposes of this subsection, the term ‘cellulosic biofuel ethanol'
means ethanol produced by hydrolysis of any lignocellulosic or hemicellulosic
matter that is available on a renewable or recurring basis.”
Subsec. (m). Pub. L.
110-343, Div. B, Sec. 308(a), added subsec. (m).
Subsec. (n). Pub. L.
110-343, Div. C, Sec. 710(a), added subsec. (n).
Subsec. (k)(4). Pub.
L. 110-289, Sec. 3081(a), amended subsec. (k) by adding
par. (4).
Subsec. (e)(3)(A)(i). Pub. L. 110-246, Sec. 15344(a),
amended clause (i). Prior to amendment it read as follows:
“(i) any race horse which is more than 2
years old at the time it is placed in service,”.
Subsec. (k). Pub.
L. 110-185, Sec. 103(c)(11), amended the heading for subsec.
(k) by substituting “December 31, 2007” for “September
10, 2001” and by substituting “January 1, 2009”
for “January 1, 2005”.
Subsec. (k). Pub.
L. 110-185, Sec. 103(a), amended subsec. (k) by substituting “December
31, 2007” for “September 10, 2001”, “January
1, 2008” for “September 11, 2001”, “January
1, 2009” for “January 1, 2005” and “January
1, 2010” for “January 1, 2006”, each place they
appeared.
Subsec. (k)(1)(A). Pub.
L. 110-185, Sec. 103(b), amended subpar. (A) by substituting “50
percent” for “30 percent”.
Subsec. (k)(2)(B)(i)(I). Pub. L. 110-185, Sec. 103(c)(1),
amended subclause (I) by substituting “(iii), and (iv)”
for “and (iii)”.
Subsec. (k)(2)(B)(i)(IV). Pub. L. 110-185, Sec. 103(c)(2),
amended subclause (II) by substituting “clause (iii)”
for “clauses (ii) and (iii)”. Note that it appears that
the legislative language should have instructed that “clause
(ii) or (iii)” be stricken and replaced with “clause (iii)”.
Subsec. (k)(2)(B)(ii). Pub. L. 110-185, Sec. 103(c)(12),
amended the heading of clause (ii) by substituting “Pre-January
1, 2009” for “Pre-January 1, 2005”.
Subsec. (k)(2)(C)(i). Pub. L. 110-185, Sec. 103(c)(3),
amended clause (i) by substituting “, (iii), and (iv)”
for “and (iii)”.
Subsec. (k)(2)(D)(iii). Pub. L. 110-185, Sec. 103(c)(5)(B),
amended clause (iii) by striking the last sentence. Before being struck,
it read as follows: “The preceding sentence shall be applied
separately with respect to property treated as qualified property
by paragraph (4) and other qualified property.”
Subsec. (k)(2)(F)(i). Pub. L. 110-185, Sec. 103(c)(4),
amended clause (i) by substituting “$8,000” for “$4,
600”.
Subsec. (k)(4). Pub. L. 110-185, Sec. 103(c)(5)(A),
struck par. (4). Before being struck, it read as follows:
“(4) 50-Percent Bonus Depreciation For Certain
Property—
“(A) In General— In the case of 50-percent
bonus depreciation property—
“(i) paragraph (1)(A) shall be applied by
substituting ‘50 percent' for ‘30 percent', and
“(ii) except as provided in paragraph (2)(D),
such property shall be treated as qualified property for purposes
of this subsection.
“(B) 50-Percent Bonus Depreciation Property—
For purposes of this subsection, the term ‘50-percent bonus
depreciation property' means property described in paragraph (2)(A)(i)—
“(i) the original use of which commences
with the taxpayer after May 5, 2003,
“(ii) which is—
“(I) acquired by the taxpayer after May 5,
2003, and before January 1, 2005, but only if no written binding contract
for the acquisition was in effect before May 6, 2003, or
“(II) acquired by the taxpayer pursuant to
a written binding contract which was entered into after May 5, 2003,
and before January 1, 2005, and
“(iii) which is placed in service by the
taxpayer before January 1, 2005, or, in the case of property described
in paragraph (2)(B) (as modified by subparagraph (C) of this paragraph)
or paragraph (2)(C) (as so modified), before January 1, 2006.
“(C) Special Rules— Rules similar to
the rules of subparagraphs (B), (C), and (E) of paragraph (2) shall
apply for purposes of this paragraph; except that references to September
10, 2001, shall be treated as references to May 5, 2003.
“(D) Automobiles—Paragraph (2)(F) shall
be applied by substituting $7,650 for $4,600 in the case of 50-percent
bonus depreciation property.
“(E) Election Of 30-Percent Bonus—
If a taxpayer makes an election under this subparagraph with respect
to any class of property for any taxable year, subparagraph (A)(i)
shall not apply to all property in such class placed in service during
such taxable year.”
Subsec. (l)(4)(A)–(C). Pub. L. 110-185, Sec. 103(c)(6),
amended par. (4) by redesignating subpar. (A)–(C) as subpar.
(B)–(D), respectively, and by adding a new subpar. (A).
Subsec. (l)(5)(A). Pub. L. 110-185, Sec. 103(c)(7)(A),
amended subpar. (A) by substituting “December 31, 2007”
for “September 10, 2001”.
Subsec. (l)(5)(B). Pub. L. 110-185, Sec. 103(c)(7)(B),
amended subpar. (B) by substituting “January 1, 2009”
for “January 1, 2005”.
2007 — Subsec. (l)(3). Pub. L. 110-172, Sec. 11(b)(1),
amended par. (3) by striking “enzymatic” before “hydrolysis”.
2006 — Subsec. (e)(3)(E)(iv),
(v). Pub. L. 109-432, Sec.
113(a), amended clauses (iv) and (v) by substituting “2008”
for “2006”.
Subsec. (j)(8). Pub.
L. 109-432, Sec. 112(a), amended par. (8) by substituting “2007”
for “2005”.
Subsec. (l). Pub.
L. 109-432, Sec. 209(a), added subsec. (l).
2005 — Subsec. (e)(3)(B)(vi)(I). Pub. L. 109-135, Sec. 410(a), amended
subclause (I) by substituting “if ‘solar and wind' were
substituted for ‘solar' in clause (i) thereof” for “if ‘solar
or wind energy' were substituted for ‘solar energy' in clause
(i) thereof”.
Subsec. (i)(15)(D). Pub.
L. 109-135, Sec. 412(s), amended subpar. (D) by substituting “Such
term shall not include” for “This paragraph shall not
apply to”.
Subsec. (k)(2)(A)(iv). Pub. L. 109-135, Sec. 403(j)(1),
amended clause (iv) by substituting “subparagraph (B) or (C)”
for “subparagraphs (B) and (C)”.
Subsec. (k)(4)(B)(ii). Pub. L. 109-135, Sec. 405(a)(1),
amended clause (ii). Before amendment, it read as follows:
“(ii) which is acquired by the taxpayer after
May 5, 2003, and before January 1, 2005, but only if no written binding
contract for the acquisition was in effect before May 6, 2003, and”.
Subsec. (k)(4)(B)(iii). Pub. L. 109-135, Sec. 403(j)(2),
amended clause (iii) by substituting “or paragraph (2)(C) (as
so modified)” for “and paragraph (2)(C)”.
Subsec. (e)(3)(B)(vi)(I). Pub. L. 109-58, Sec. 1301(f)(5),
amended subclause (I). Before amendment, it read as follows:
“(I) is described in subparagraph (A) of
section 48(a)(3) (or would be so described if ‘solar and wind'
were substituted for ‘solar' in clause (i) thereof,”.
Subsec. (e)(3)(C)(iii)–(v). Pub. L. 109-58, Sec. 1326(a), amended
subpar. (C) by striking “and” at the end of clause (iii);
by redesignating clause (iv) as clause (v); and by adding clause (iv).
Subsec. (e)(3)(E)(v)–(vii). Pub. L. 109-58, Sec. 1308(a), amended
subpar. (E) by striking “and” at the end of clause (v);
by substituting “, and” for the period at the end of clause
(vi); and by adding clause (vii).
Subsec. (e)(3)(E)(vi)–(viii). Pub. L. 109-58, Sec. 1325(a), amended
subpar. (E) by striking “and” at the end of clause (vi);
by substituting “, and” for the period at the end of clause
(vii); and by adding clause (viii).
Subsec. (g)(3)(B). Pub.
L. 109-58, Sec. 1308(b), amended subpar. (B) by inserting
the item after the item relating to subparagraph (E)(vi).
Subsec. (g)(3)(B). Pub.
L. 109-58, Sec. 1325(b), amended subpar. (B) by inserting
the item after the item relating to subparagraph (E)(vii).
Subsec. (g)(3)(B). Pub.
L. 109-58, Sec. 1326(c), amended subpar. (B) by inserting
the item after the item relating to subparagraph (C)(iii).
Subsec. (i)(17). Pub.
L. 109-58, Sec. 1326(b), added par. (17).
2004 — Subsec. (b)(2)(A). Pub. L. 108-357, Sec. 211(d)(2),
amended subpar. (A) by inserting “not referred to in paragraph
(3)” before the comma.
Subsec. (b)(3)(G)–(H). Pub. L. 108-357, Sec. 211(d)(1),
amended par. (3) by adding subpar. (G) and (H).
Subsec. (e)(3)(C)(ii). Pub. L. 108-357, Sec. 704(a), amended
subpar. (C) by redesignating clause (ii) as clause (iii) and by adding
clause (ii).
Subsec. (e)(3)(C)(ii)–(iii). Pub. L. 108-357, Sec. 706(a), amended
subpar. (C) by striking “and” at the end of clause (ii);
by redesignating clause (iii) as clause (iv); and by adding clause
(iii).
Subsec. (e)(3)(E)(ii)–(v). Pub. L. 108-357, Sec. 211(a), amended
subpar. (E) by striking “and” at the end of clause (ii);
by substituting “, and” for the period at the end of clause
(iii); and by adding clause (iv) and (v).
Subsec. (e)(3)(E)(iv)–(vi). Pub. L. 108-357, Sec. 901(a), amended
subpar. (E) by striking “and” at the end of clause (iv);
by substituting “, and” for the period at the end of clause
(v); and by adding clause (vi).
Subsec. (e)(3)(F). Pub.
L. 108-357, Sec. 901(b), amended par. (3) by adding subpar.
(F).
Subsec. (e)(6). Pub.
L. 108-357, Sec. 211(b), amended subsec. (e) by adding par.
(6).
Subsec. (e)(7). Pub.
L. 108-357, Sec. 211(c), amended subsec. (e) by adding par.
(7).
Subsec. (g)(3)(A). Pub.
L. 108-357, Sec. 847(a), amended subpar. (A) by inserting “(notwithstanding
any other subparagraph of this paragraph)” after “shall”.
Subsec. (g)(3)(B). Pub.
L. 108-357, Sec. 211(e), amended subpar. (B) by adding two
items relating to subpar. (E)(iv) and (v) the table.
Subsec. (g)(3)(B). Pub.
L. 108-357, Sec. 706(c), amended subpar. (B) by adding the
item relating to subpar. (C)(iii) to the table.
Subsec. (g)(3)(B). Pub.
L. 108-357, Sec. 901(c), amended subpar. (B) by adding the
two items after the item relating to subpar. (E)(v) to the table.
Subsec. (h)(2)(A)(ii)–(iv). Pub. L. 108-357, Sec. 847(e), amended
subpar. (A) by striking “and” at the end of clause (ii);
by substituting “, and” for the period at the end of clause
(iii); and by adding clause (iv) and the material following clause
(iv).
Subsec. (h)(3)(A). Pub.
L. 108-357, Sec. 847(d), amended subpar. (A) by adding the
sentence at the end.
Subsec. (i)(3)(A)(i)–(ii). Pub. L. 108-357, Sec. 847(c), amended
subpar. (A) by striking “and” at the end of clause (i);
by redesignating clause (ii) as clause (iii); and by adding clause
(ii).
Subsec. (i)(15). Pub.
L. 108-357, Sec. 704(b), amended subsec. (i) by adding par.
(15).
Subsec. (i)(16). Pub.
L. 108-357, Sec. 706(b), amended subsec. (i) by adding par.
(16).
Subsec. (k)(2)(A)(iv). Pub. L. 108-357, Sec. 336(a)(2),
amended clause (iv) by substituting “subparagraphs (B) and (C)”
for “subparagraph (B)”.
Subsec. (k)(2)(B)(iv). Pub. L. 108-357, Sec. 336(b)(1),
amended subpar. (B) by adding clause (iv).
Subsec. (k)(2)(C)–(F). Pub. L. 108-357, Sec. 336(a)(1),
amended par. (2) by redesignating subpar. (C) through (F) as subpar.
(D) through (G) and added subpar. (C).
Subsec. (k)(2)(E)(iii)(II). Pub. L. 108-357, Sec. 337(a), amended
clause (II) by inserting the parenthetical text before the comma at
the end.
Subsec. (k)(4)(A)(ii). Pub. L. 108-357, Sec. 336(b)(2),
amended clause (ii) by substituting “paragraph (D)” for “paragraph
(C)”.
Subsec. (k)(4)(B)(iii). Pub. L. 108-357, Sec. 336(b)(3),
amended clause (iii) by inserting “and paragraph (2)(C)”
after “of this paragraph)”.
Subsec. (k)(4)(C). Pub. L. 108-357, Sec. 336(b)(4),
amended subpar. (C) by substituting “subparagraphs (B), (C),
and (E)” for “subparagraphs (B) and (D)”.
Subsec. (k)(4)(D). Pub. L. 108-357, Sec. 336(b)(5),
amended subpar. (D) by substituting “Paragraph (2)(F)”
for “Paragraph (2)(E)”.
Subsec. (j)(8). Pub.
L. 108-311, Sec. 316, amended par. (8) by substituting “December
31, 2005” for “December 31, 2004”.
Subsec. (k)(2)(B)(i). Pub. L. 108-311, Sec. 403(a)(1),
amended clause (i). Before amendment it read as follows:
“(i) In General.—The term ‘qualified
property' includes property—
“(I) which meets the requirements of clauses
(i), (ii), and (iii) of subparagraph (A),
“(II) which has a recovery period of at least
10 years or is transportation property, and
“(III) which is subject to section 263A by
reason of clause (ii) or (iii) of subsection (f)(1)(B) thereof.”
Subsec. (k)(2)(D)(ii). Pub. L. 108-311, Sec. 403(a)(2)(B),
amended clause (ii) by inserting “clause (iii) and” before “subparagraph
(A)(ii)”.
Subsec. (k)(2)(D)(ii). Pub. L. 108-311, Sec. 408(a)(6),
amended clause (ii) by inserting “is” after “if
property” and by striking “is” at the beginning
of clause (I).
Subsec. (k)(2)(D)(iii)–(iv). Pub. L. 108-311, Sec. 403(a)(2)(A),
amended subpar. (D) by adding clauses (iii) and (iv).
Subsec. (k)(2)(F). Pub. L. 108-311, Sec. 408(a)(8),
amended the heading of subpar. (F) by substituting “Mininum”
for “Miniumum”.
2003 — Subsec. (k). Pub. L. 108-27, Sec. 201(c)(1),
amended the heading of subsec. (k) by substituting “January
1, 2005” for “September 11, 2004”.
Subsec. (k)(2)(A)(iii). Pub. L. 108-27, Sec. 201(b)(2),
amended clause (iii) by substituting “January 1, 2005”
for “September 11, 2004” each place it appeared.
Subsec. (k)(2)(B)(ii). Pub. L. 108-27, Sec. 201(b)(1),
amended clause (ii) by substituting “January 1, 2005”
for “September 11, 2004” each place it appeared.
Subsec. (k)(2)(C)(iii). Pub. L. 108-27, Sec. 201(b)(3),
amended clause (iii) by adding the sentence at the end.
Subsec. (k)(2)(D)(i). Pub. L. 108-27, Sec. 201(b)(1),
amended clause (i) by substituting “January 1, 2005” for “September
11, 2004”.
Subsec. (k)(4). Pub.
L. 108-27, Sec. 201(a), added par. (4).
2002 — Subsec. (j)(8). Pub. L. 107-147, Sec. 613(b), amended
par. (8) by substituting “December 31, 2004” for “December
31, 2003”.
Subsec. (k). Pub.
L. 107-147, Sec. 101(a), added subsec. (k).
1998 — Subsec. (c)(1). Pub. L. 105-206, Sec. 6006(b)(2),
amended subsec. (c) by substituting the above for the text that preceded
the table in par. (1). Prior to amendment it read as follows:
“(c) Applicable Recovery Period.—For
purposes of this section—
“(1) In General.—Except
as provided in paragraph (2), the applicable recovery period shall
be determined in accordance with the following table:”
Subsec. (c)(2). Pub.
L. 105-206, Sec. 6006(b)(1), struck par. (2). Prior to being
struck it read as follows:
“(2) Property for which
150 percent method elected.—In the case of property to which
an election under subsection (b)(2)(C) applies, the applicable recovery
period shall be determined under the table contained in subsection
(g)(2)(C).”
1997 — Subsec. (e)(3)(A). Pub. L. 105-34, Sec. 1086(b)(1),
amended clause (i) by striking “and”; amended clause (ii)
by substituting “, and” for “.”; and added
clause (iii).
Subsec. (g)(3)(B). Pub. L. 105-34, Sec. 1086(b)(2),
amended the table in subpar. (B) by inserting “(A)(iii)............4”
before the first item.
Subsec. (i)(8)(C). Pub.
L. 105-34, Sec. 1213(c), added subpar. (C).
Subsec. (i)(14). Pub.
L. 105-34, Sec. 1086(b)(3), added par. (14).
Subsec. (j)(6). Pub.
L. 105-34, Sec. 1604(c)(1), amended par. (6) by adding a
flush sentence at the end.
1996 — Subsec. (b)(3)(F). Pub. L. 104-188, Sec. 1613(b)(1) added
new subpar. (F).
Subsec. (c)(1). Pub.
L. 104-188, Sec. 1613(b)(2) added to the table the item
regarding water utility property.
Subsec. (e)(3)(B). Pub. L. 104-188, Sec. 1702(h)(1)(B) added
a new flush sentence to the end of subpar. (B).
Subsec. (e)(3)(B). Pub. L. 104-188, Sec. 1702(h)(1)(A) amended
clause (vi) by striking “or” at the end of subclause (I),
by striking the period and inserting “, or” at the end
of subclause (II), and adding new subclause (III).
Subsec. (e)(3)(E). Pub.
L. 104-188, Sec. 1120(a) struck “and” at the
end of clause (i), substituted “, and” for the period
at the end of clause (ii), and added a new clause (iii).
Subsec. (e)(3)(F). Pub. L. 104-188, Sec. 1613(b)(3)(B)(i) struck
subpar. (F), which prior to being stricken read as follows:
“(F) 20-Year Property,—The term ‘20-year
property' includes any municipal sewers.”
Subsec. (e)(5). Pub. L. 104-188, Sec. 1613(b)(3)(A) added
new par. (5).
Subsec. (g)(2)(C)(iv). Pub. L. 104-188, Sec. 1613(b)(4) added
the words “or water utility property” after “tunnel
bore”.
Subsec. (g)(3). Pub. L. 104-188, Sec. 1613(b)(3)(B)(ii) struck
from the table the following: “(F)...........................................
50”.
Subsec. (g)(3)(B). Pub.
L. 104-188, Sec. 1120(b) inserted the item following the
item related to subpar. (E)(ii).
Subsec. (g)(4)(K). Pub. L. 104-188, Sec. 1702(h)(1)(C) substituted “section
48(l)(3)(A)(ix) (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990)” for “section
48(a)(3)(A)(iii)”.
Subsec. (i)(8). Pub.
L. 104-188, Sec. 1121(a) generally revised par. (8), which
prior to amendment read as follows:
“(8) Treatment Of Leasehold Improvements.—In
the case of any building erected (or improvements made) on leased
property, if such building or improvement is property to which this
section applies, the depreciation deduction shall be determined under
the provisions of this section.”
Subsec. (g)(3)(B). Pub. L. 104-188, Sec. 1704(t)(54),
provided that “clause (i) of section 11813(b)(13) of the Revenue
Reconciliation Act of 1990 shall be applied as if a comma appeared
after ‘(3)(A)(ix)’ in the material proposed to be stricken.”
1995 — Subsec. (g)(4)(B)(i). Pub. L. 104-88, Sec. 304(a) substituted “domestic
railroad corporation providing transportation subject to subchapter
I of chapter 105” with “rail carrier subject to part A
of subtitle IV”.
1993 — Subsec. (c)(1). Pub. L. 103-66, Sec. 13151(a),
amended par. (1) by substituting “Nonresidential real property................
31.5 years” for “Nonresidential real property.................39
years”.
Subsec. (j). Pub.
L. 103-66, Sec. 13321(a), added subsec. (j).
1990 — Subsec. (e)(2)(A). Pub. L. 101-508, Sec. 11812(b)(2)(A),
amended subpar. (A) generally. Prior to amendment, subpar. (A) read
as follows: “The term ‘residential rental property’ has the
meaning given such term by section 167(j)(2)(B).”
Subsec. (e)(3)(B)(vi)(I). Pub. L. 101-508, Sec. 11813(b)(9)(A)(i),
as amended by Pub. L. 104-188,
Sec. 1704(t)(54), substituted “subparagraph (A) of
section 48(a)(3) (or would be so described if ‘solar and wind’ were
substituted for ‘solar’ in clause (i) thereof)” for “paragraph
(3)(A)(viii), (3)(A)(ix), or (4) of section 48(l)”.
Subsec. (e)(3)(B)(vi)(II). Pub. L. 101-508, Sec. 11813(b)(9)(A)(ii),
inserted “(as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990)” after “48(l)”.
Subsec. (e)(3)(D)(i). Pub. L. 101-508, Sec. 11813(b)(9)(B)(i),
substituted “subsection (i)(13)” for “section 48(p)”.
Subsec. (f)(2). Pub. L. 101-508, Sec. 11812(b)(2)(C),
substituted “subsection (i)(10)” for “section 167(l)(3)(A).”
Subsec. (g)(4). Pub. L. 101-508, Sec. 11813(b)(9)(C),
substituted heading for one which read: “Property Used Predominantly
Outside The United States” and amended text generally. Prior
to amendment, text read as follows: “For purposes of this subsection,
rules similar to the rules under section 48(a)(2) (including the exceptions
contained in subparagraph (B) thereof) shall apply in determining
whether property is used predominantly outside the United States.
In addition to the exceptions contained in such subparagraph (B),
there shall be excepted any satellite or other spacecraft (or any
interest therein) held by a United States person if such satellite
or spacecraft was launched from within the United States.”
Subsec. (i)(1). Pub. L. 101-508, Sec. 11812(b)(2)(D),
inserted at end “The reference in this paragraph to subsection
(m) of section 167 shall be treated as a reference to such subsection
as in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990.”
Subsec. (i)(7)(B)(i). Pub. L. 101-508, Sec. 11801(c)(8)(B),
struck out, “371(a), 374(a),” after “361,”.
Subsec. (i)(9)(A)(ii). Pub. L. 101-508, Sec. 11812(b)(2)(E),
struck out “(determined without regard to section 167(l))”
after “section 167”.
Subsec. (i)(10). Pub. L. 101-508, Sec. 11812(b)(2)(B),
amended par. (10) generally. Prior to amendment, par. (10) read as
follows: “The term ‘public utility property’ has the meaning
given such term by section 167(l)(3)(A).”
Subsec. (i)(13). Pub. L. 101-508, Sec. 11813(b)(9)(B)(ii),
added par. (13).
1989 — Subsec. (b)(3)(D),
(E). Pub. L. 101-239, Sec. 7816(f),
redesignated subpar. (D), relating to property described in subsec.
(e)(3)(D)(ii), as (E).
Subsec. (b)(5). Pub.
L. 101-239, Sec. 7816(e)(1), substituted “paragraph
(2)(C)” for “paragraph (2)(B)”.
Subsec. (c)(2). Pub.
L. 101-239, Sec. 7816(e)(2), substituted “subsection
(b)(2)(C)” for “subsection (b)(2)(B)”.
Subsec. (i)(1). Pub.
L. 101-239, Sec. 7816(w), made clarifying amendment to directory
language of Pub. L. 100-647, Sec. 6253,
see 1988 Amendment note below.
1988 — Subsec. (b)(2). Pub. L. 100-647, Sec. 1002(a)(11)(A),
substituted “150 percent declining balance method in certain
cases” for “15-year and 20-year property” in heading
and amended text generally. Prior to amendment, text read as follows: “In
the case of 15-year and 20-year property, paragraph (1) shall be applied
by substituting ‘150 percent’ for ‘200 percent’.”
Subsec. (b)(2)(B), (C). Pub. L. 100-647, Sec. 6028(a),
added subpar. (B) and redesignated former subpar. (B) as (C).
Subsec. (b)(3)(C). Pub. L. 100-647, Sec. 1002(i)(2)(B)(i),
added subpar. (C). Former subpar. (C) redesignated (D).
Subsec. (b)(3)(D). Pub.
L. 100-647, Sec. 6029(b), added subpar. (D) relating to
property described in subsec. (e)(3)(D)(ii).
Pub.
L. 100-647, Sec. 1002(i)(2)(B)(i), redesignated subpar.
(C), relating to property with respect to which the taxpayer elects
under par. (5), as (D).
Subsec. (b)(5). Pub. L. 100-647, Sec. 1002(i)(2)(B)(ii),
substituted “paragraph (3)(D)” for “paragraph (3)(C)”.
Pub. L.
100-647, Sec. 1002(a)(11)(B), substituted “paragraph
(2) (B) or (3)(C)” for “paragraph (3)(C)”.
Subsec. (c). Pub.
L. 100-647, Sec. 1002(a)(11)(C), amended subsec. (c) generally,
designating existing provisions as par. (1) and adding par. (2).
Subsec. (c)(1). Pub. L. 100-647, Sec. 1002(i)(2)(A),
inserted table item relating to any railroad grading or tunnel bore.
Subsec. (d)(2)(C). Pub. L. 100-647, Sec. 1002(i)(2)(D),
added subpar. (C).
Subsec. (d)(3)(A)(i). Pub. L. 100-647, Sec. 1002(a)(5),
struck out “and which are” after “this section applies”.
Subsec. (d)(3)(B). Pub. L. 100-647, Sec. 1002(a)(23)(A),
struck out “real” after “Certain” in heading
and amended text generally. Prior to amendment, text read as follows: “For
purposes of subparagraph (A), nonresidential real property and residential
rental property shall not be taken into account.”
Subsec. (d)(3)(B)(i). Pub. L. 100-647, Sec. 1002(i)(2)(E),
substituted “residential rental property, and railroad grading
or tunnel bore” for “and residential rental property”.
Subsec. (e)(3)(B)(v). Pub. L. 100-647, Sec. 1002(a)(21),
substituted “any section 1245 property” for “any
property”.
Subsec. (e)(3)(C). Pub. L. 100-647, Sec. 6027(b)(1)(C),
redesignated cl. (iii) as (ii), and struck out former cl. (ii) which
read as follows: “any single-purpose agricultural or horticultural
structure (within the meaning of section 48(p)), and”.
Subsec. (e)(3)(D). Pub.
L. 100-647, Sec. 6029(a), amended subpar. (D) generally.
Prior to amendment, subpar. (D) read as follows: “The term ‘10-year
property’ includes any single purpose agricultural or horticultural
structure (within the meaning of section 48(p)).”
Pub. L. 100-647,
Sec. 6027(a), added subpar. (D). Former subpar. (D) redesignated
(E).
Subsec. (e)(3)(E), (F). Pub. L. 100-647, Sec. 6027(a),
redesignated former subpars. (D) and (E) as (E) and (F), respectively.
Subsec. (e)(4). Pub. L. 100-647, Sec. 1002(i)(2)(C),
added par. (4).
Subsec. (f)(4). Pub. L. 100-647, Sec. 1002(a)(16)(B),
amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Any
sound recording described in section 48(r)(5).”
Subsec. (f)(5)(B)(ii). Pub. L. 100-647, Sec. 1002(a)(6)(A)(i),
substituted “1st taxable year” for “1st full taxable
year”.
Subsec. (f)(5)(B)(iii). Pub. L. 100-647, Sec. 1002(a)(6)(A)(ii),
added cl. (iii).
Subsec. (f)(5)(C). Pub.
L. 100-647, Sec. 100-647, Sec. 1002(a)(6)(B), added subpar.
(C).
Subsec. (g)(2)(C). Pub. L. 100-647, Sec. 1002(i)(2)(F),
added item (iv) in table.
Subsec. (g)(3)(B). Pub.
L. 100-647, Sec. 6029(c), substituted “(D)(i)”
for “(D)” and added item for “(D)(ii)” in
table.
Pub. L. 100-647,
Sec. 6027(b)(2), substituted “(D)” for “(C)(ii)”, “(E)(i)”
for “(D)(i)”, “(E)(ii)” for “(D)(ii)”,
and “(F)” for “(E)” in table.
Subsec. (h)(2)(B). Pub. L. 100-647, Sec. 1002(a)(8),
amended subpar. (B) generally. Prior to amendment, subpar. (B) read
as follows:
“(i) Income From Property Subject To United
States Tax.—Clause (iii) of subparagraph (A) shall not apply
with respect to any property if more than 50 percent of the gross
income for the taxable year derived by the foreign person or entity
from the use of such property is—
“(I) subject to tax under this chapter, or
“(II) included under section
951 in the gross income of a United States shareholder for the taxable
year with or within which ends the taxable year of the controlled
foreign corporation in which such income was derived.
For purposes of the preceding sentence, any exclusion
or exemption shall not apply for purposes of determining the amount
of the gross income so derived, but shall apply for purposes of determining
the portion of such gross income subject to tax under this chapter.
“(ii) Movies And Sound Recordings.—Clause
(iii) of subparagraph (A) shall not apply with respect to any qualified
film (as defined in section 48(k)(1)(B)) or any sound recording (as
defined in section 48(r)(5)).”
Subsec. (i)(1). Pub.
L. 100-647, Sec. 6253, as amended by Pub. L. 101-239, Sec. 7816(w),
amended par. (1) generally, substituting a single par. relating to
class life for former subpar. (A) relating to class life generally,
(B) relating to Secretarial authority, (C) relating to effect of modification,
(D) prohibiting modification of assigned property before January 1,
1992, and (E) relating to assigned property and item.
Subsec. (i)(1)(E)(iii). Pub. L. 100-647, Sec. 1002(i)(2)(G),
added cl. (iii), which provided: “Special rule for railroad
grading or tunnel bores.—In the case of any property which is
a railroad grading or tunnel bore—
“(I) such property shall be treated as an
assigned property,
“(II) the recovery period
applicable to such property shall be treated as an assigned item,
and
“(III) clause (ii) of subparagraph (D) shall
not apply.”
Subsec. (i)(7)(A). Pub. L. 100-647, Sec. 1002(a)(7)(A),
inserted at end “In any case where this section as in effect
before the amendments made by section 201 of the Tax Reform Act of
1986 applied to the property in the hands of the transferor, the reference
in the preceding sentence to this section shall be treated as a reference
to this section as so in effect.”
Subsec. (i)(7)(B). Pub. L. 100-647, Sec. 1002(a)(7)(B),
amended subpar. (B) generally. Prior to amendment, subpar. (B) read
as follows: “The transactions described in this subparagraph
are any transaction described in section 332, 351, 361, 371(a), 374(a),
721, or 731. Subparagraph (A) shall not apply in the case of a termination
of a partnership under section 708(b)(1)(B).”
Subsec. (i)(7)(D). Pub. L. 100-647, Sec. 1002(a)(7)(C),
struck out subpar. (D) which read as follows: “This paragraph
shall not apply to any transaction to which subsection (f)(5) applies
(relating to churning transactions).”
Subsec. (j)(9)(E). Pub. L. 100-647, Sec. 1018(b)(2),
amended subpar. (E), as amended by section 1802(a)(2) of Pub. L. 99-514 and as in effect before the
general amendment by section 201(a) of Pub.
L. 99-514, by substituting “this paragraph and paragraph
(8)” for “this paragraph” in cls. (i) and (ii)(I)
and by striking out cl. (iii) and inserting a new cl. (iii) which
read as follows: “Tax-Exempt Controlled Entity.—
“(I) In General.—The term ‘tax-exempt
controlled entity’ means any corporation (which is not a tax-exempt
entity determined without regard to this subparagraph and paragraph
(4)(E)) if 50 percent or more (in value) of the stock in such corporation
is held by 1 or more tax-exempt entities (other than a foreign person
or entity).
“(II) Only 5-Percent Shareholders Taken Into
Account In Case Of Publicly Traded Stock.—For purposes of subclause
(I), in the case of a corporation the stock of which is publicly traded
on an established securities market, stock held by a tax-exempt entity
shall not be taken into account unless such entity holds at least
5 percent (in value) of the stock in such corporation. For purposes
of this subclause, related entities (within the meaning of paragraph
(7)) shall be treated as 1 entity.
“(III) Section 318 To Apply.—For purposes
of this clause, a tax-exempt entity shall be treated as holding stock
which it holds through application of section 318 (determined without
regard to the 50-percent limitation contained in subsection (a)(2)(C)
thereof).”
1986—Pub. L. 99-514, Sec. 201(a), amended
section generally, applicable, with exceptions enumerated in sections
203, 204, and 251(d) of Pub. L. 99-514 (set
out as notes below and under section 46 of this title), to property
placed in service after Dec. 31, 1986, modifying existing accelerated
cost recovery system by substituting new subsecs. (a) to (i) for former
subsecs. (a) to (k). See following paragraphs of 1986 Amendment note
for amendments to former text by sections 1802 and 1809 of Pub. L. 99-514.
Subsec. (b)(2)(A). Pub. L. 99-514, Sec. 1809(a)(2)(A)(i)(I),
struck out closing provisions relating to determination, in the case
of 19-year real property, of applicable percentage in taxable year
in which the property is placed in service.
Subsec. (b)(2)(B). Pub. L. 99-514, Sec. 1809(a)(2)(A)(i)(II),
substituted “Mid-Month Convention For 19-Year Real Property”
for “Special Rule For Year Of Disposition” in heading
and amended text generally, substituting “In the case of 19-year
real property, the amount of the deduction determined under any provision
of this section (or for purposes of section 57(a)(12)(B) or 312(k))
for any taxable year shall be determined on the basis of the number
of months (using a mid-month convention) in which the property is
in service.” for prior provisions.
Subsec. (b)(3)(A). Pub. L. 99-514, Sec. 1809(a)(1)(A),
which directed that the table be amended by striking “and low-income
housing” in last item, was executed by striking “and low-income
housing” after “19-year real property” in next-to-the-last
item, to reflect the probable intent of Congress, because that phrase
did not appear in last item.
Pub. L.
99-514, Sec. 1809(a)(1)(B), inserted at the end item for
low-income housing with recovery periods of 15, 35, or 45 years.
Subsec. (b)(4)(B). Pub. L. 99-514, Sec. 1809(a)(2)(B),
substituted “Monthly convention” for “Special Rule
For Year Of Disposition” in heading and amended text generally,
substituting “In the case of low-income housing, the amount
of the deduction determined under any provision of this section (or
for purposes of section 57(a)(12)(B) or 312(k)) for any taxable year
shall be determined on the basis of the number of months (treating
all property placed in service or disposed of during any month as
placed in service or disposed of on the first day of such month) in
which the property is in service.” for prior provisions.
Subsec. (f)(2)(B). Pub. L. 99-514, Sec. 1809(a)(2)(A)(ii),
redesignated existing provisions as entire subpar. (B), struck out “(i)
In general”, redesignated subcls. (I) and (II) as cls. (i) and
(ii), and in cl. (ii) struck out “(taking into account the next
to the last sentence of subsection (b)(2)(A))” after “assign
percentages” and struck out heading, “(ii) Special Rule
For Disposition” and text, “In the case of a disposition
of 19-year real property or low-income housing described in clause
(i), subsection (b)(2)(B) shall apply.”
Subsec. (f)(10)(A). Pub. L. 99-514, Sec. 1809(b)(1),
amended subpar. (A) generally, substituting “In the case of
recovery property transferred in a transaction described in subparagraph
(B), for purposes of computing the deduction allowable under subsection
(a) with respect to so much of the basis in the hands of the transferee
as does not exceed the adjusted basis in the hands of the transferor—
“(i) if the transaction
is described in subparagraph (B)(i), the transferee shall be treated
in the same manner as the transferor, or
“(ii) if the transaction
is described in clause (ii) or (iii) of subparagraph (B) and the transferor
made an election with respect to such property under subsection (b)(3)
or (f)(2)(C), the transferee shall be treated as having made the same
election (or its equivalent).” for prior provisions.
Subsec. (f)(10)(B). Pub. L. 99-514, Sec. 1809(b)(2),
inserted at end “Clause (i) shall not apply in the case of the
termination of a partnership under section 708(b)(1)(B).”
Subsec. (f)(12)(B)(ii). Pub. L. 99-514, Sec. 1809(a)(4)(A),
amended cl. (ii) generally, substituting “In the case of 19-year
real property, the amount of the deduction allowed shall be determined
by using the straight-line method (without regard to salvage value)
and a recovery period of 19 years.” for prior provisions.
Subsec. (f)(12)(C). Pub. L. 99-514, Sec. 1809(a)(4)(B),
substituted “Exception for low- and moderate-income housing”
for “Exception for projects for residential rental property”
in heading and amended text generally, substituting “Subparagraph
(A) shall not apply to—
“(i) any low-income housing, and
“(ii) any other recovery
property which is placed in service in connection with projects for
residential rental property financed by the proceeds of obligations
described in section 103(b)(4)(A).” for prior provisions.
Subsec. (f)(14), (15). Pub. L. 99-514, Sec. 1802(b)(1),
redesignated the par. (13) relating to motor vehicle operating leases
as (14) and redesignated former par. (14) as (15).
Subsec. (j)(2)(B)(ii). Pub. L. 99-514, Sec. 1809(a)(2)(C)(i),
substituted “Cross Reference” for “19-Year Real
Property” in heading and amended text generally, substituting “For
other applicable conventions, see paragraphs (2) (B) and (4)(B) of
subsection (b).” for prior provisions.
Subsec. (j)(3)(D). Pub. L. 99-514, Sec. 1802(a)(1),
inserted at end “For purposes of subparagraph (B)(iii), any
portion of a property so used shall not be treated as leased to a
tax-exempt entity in a disqualified lease.”
Subsec. (j)(4)(E)(i). Pub. L. 99-514, Sec. 1802(a)(2)(A),
(G), substituted “any property (other than property held by
such organization)” for “any property of which such organization
is the lessee”, “first used by” for “first
leased to”, and “preceding sentence and subparagraph (D)(ii)”
for “preceding sentence”.
Subsec. (j)(4)(E)(ii). Pub. L. 99-514, Sec. 1802(a)(2)(B),
(C), struck out “of which such organization is the lessee”
after “respect to any property” in subcl. (I) and substituted “is
first used by the organization” for “is placed in service
under the lease” in subcl. (II).
Subsec. (j)(4)(E)(iv). Pub. L. 99-514, Sec. 1802(a)(2)(D),
added cl. (iv), first used, which read as follows: “For purposes
of this subparagraph, property shall be treated as first used by the
organization—
“(I) when the property
is first placed in service under a lease to such organization, or
“(II) in the case of property
leased to (or held by) a partnership (or other pass-thru entity) in
which the organization is a member, the later of when such property
is first used by such partnership or pass-thru entity or when such
organization is first a member of such partnership or pass-thru entity.”
Subsec. (j)(5)(C)(iv). Pub. L. 99-514, Sec. 1802(a)(3),
struck out cl. (iv), relating to exclusion of property not subject
to rapid obsolescence.
Subsec. (j)(8), (9)(A). Pub. L. 99-514, Sec. 1802(a)(4)(A),
(B)(i), struck out “and paragraphs (4) and (5) of section 48(a)”
after “For purposes of this subsection” in introductory
provisions.
Subsec. (j)(9)(B)(i). Pub. L. 99-514, Sec. 1802(a)(4)(B)(ii),
inserted a comma between “loss” and “deduction”.
Subsec. (j)(9)(D). Pub. L. 99-514, Sec. 1802(a)(7)(A),
added subpar. (D), determination of whether property used in unrelated
trade or business, which read as follows: “For purposes of this
subsection, in the case of any property which is owned by a partnership
which has both a tax-exempt entity and a person who is not a tax-exempt
entity as partners, the determination of whether such property is
used in an unrelated trade or business of such an entity shall be
made without regard to section 514.” Former subpar. (D) was
redesignated (E).
Subsec. (j)(9)(E). Pub. L. 99-514, Sec. 1802(a)(7),
redesignated former subpar. (D) as (E) and substituted “(C),
and (D)” for “and (C)”. Former subpar. (E), was
redesignated (F).
Pub.
L. 99-514, Sec. 1802(a)(2)(E)(i), added subpar. (E), treatment
of certain taxable entities, consisting of cl. (i), which read:
“(i) In General.—For purposes of this
paragraph, except as otherwise provided in this subparagraph, any
tax-exempt controlled entity shall be treated as a tax-exempt entity.”,
cl. (ii), election, which read: “If a tax-exempt controlled
entity makes an election under this clause—
“(I) such entity shall
not be treated as a tax-exempt entity for purposes of this paragraph,
and
“(II) any gain recognized
by a tax-exempt entity on any disposition of an interest in such entity
(and any dividend or interest received or accrued by a tax-exempt
entity from such tax-exempt controlled entity) shall be treated as
unrelated business taxable income for purposes of section 511.
Any such election shall be irrevocable and shall
bind all tax-exempt entities holding interests in such tax-exempt
controlled entity. For purposes of subclause (II), there shall only
be taken into account dividends which are properly allocable to income
of the tax-exempt controlled entity which was not subject to tax under
this chapter.”;
and cl. (iii), which read:
“(iii) Tax-Exempt Controlled Entity.—The
term ‘tax-exempt controlled entity' means any corporation (which
is not a tax-exempt entity determined without regard to this subparagraph
and paragraph (4)(E)) if 50 percent or more (by value) of the stock
in such corporation is held (directly or through the application of
section 318 determined without regard to the 50-percent limitation
contained in subsection (a)(2)(C) thereof) by 1 or more tax-exempt
entities.”
Former subpar. (E) was redesignated (F).
Subsec. (j)(9)(F). Pub. L. 99-514, Sec. 1802(a)(7)(A),
redesignated former subpar. (E) as (F). Former subpar. (F) was redesignated
(G).
Pub.
L. 99-514, Sec. 1802(a)(2)(E)(i), redesignated former subpar.
(E) as (F).
Subsec. (j)(9)(G). Pub. L. 99-514, Sec. 1802(a)(7)(A),
redesignated former subpar. (F) as (G).
1985 — Subsec. (b)(2). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property” in heading and wherever appearing in text.
Subsec. (b)(2)(A)(i). Pub.
L. 99-121, Sec. 103(a), substituted “19-year recovery
period” for “18-year recovery period”.
Subsec.(b)(3)(A). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property” in table.
Pub. L. 99-121,
Sec. 103(b)(2), substituted “19, 35, or 45 years”
for “18, 35, or 45” in table.
Subsec. (b)(3)(B)(ii), (iii). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property” wherever appearing.
Subsec. (c)(2)(D). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property” in heading and in text.
Subsec. (d)(2)(B). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property”.
Subsec. (f)(1)(B)(ii). Pub. L. 99-121, Sec. 103(b)(3)(B),
substituted “March 15, 1984, and before May, 9, 1985, the”
for “March 15, 1984, the”.
Subsec. (f)(1)(B)(iii), (iv). Pub. L. 99-121, Sec. 103(b)(3)(A),
(C), added cl. (iii), redesignated former cl. (iii) as (iv), and in
cl. (iv) substituted “, (ii), or (iii)” for “or
(ii)”.
Subsec. (f)(2), (5). Pub. L. 99-121, Sec. 103(b)(1)(A),
substituted “19-year real property” for “18-year
real property” wherever appearing.
Subsec. (f)(12)(B)(ii). Pub. L. 99-121, Sec. 103(b)(4),
substituted “19-year real property” for “15-year
real property” in heading and wherever appearing in text, and
substituted “19 years” for “15 years”.
Subsec. (j). Pub.
L. 99-121, Sec. 103(b)(1)(A), substituted “19-year
real property” for “18-year real property” wherever
appearing in headings, table, and text.
1984 — Subsec. (b)(2). Pub. L. 98-369, Sec. 111(a)(1),
substituted “18-year real property” for “15-year
real property” in heading and wherever appearing in text.
Pub. L. 98-369,
Sec. 111(d), inserted in provision following cl. (ii) “(using
a mid-month convention)”.
Subsec. (b)(2)(A). Pub. L. 98-369, Sec. 111(b)(3)(A),
struck out in text following cl. (ii) provision that for purposes
of this subparagraph “low-income housing” means property
described in section 1250(a)(1)(B)(i), (ii), (iii), or (iv).
Subsec. (b)(2)(A)(i). Pub. L. 98-369, Sec. 111(a)(2),
substituted “18-year recovery period” for “15-year
recovery period”.
Subsec. (b)(2)(A)(ii). Pub. L. 98-369, Sec. 111(a)(3),
struck out “(200 percent declining balance method in the case
of low-income housing)” after “declining balance method”.
Subsec. (b)(2)(B). Pub.
L. 98-369, Sec. 111(d), inserted “(using a mid-month
convention)”.
Subsec. (b)(3)(A). Pub. L. 98-369, Sec. 111(e)(9)(A),
substituted “under paragraph (1), (2), or (4)” for “under
paragraphs (1) and (2)”.
Pub. L. 98-369,
Sec. 111(e)(9)(B), substituted in table “18-year real
property and low-income housing” for “15-year real property”
and “18” for “15” and struck out “years”
after “45”.
Subsec. (b)(3)(B)(ii). Pub. L. 98-369, Sec. 111(e)(2),
substituted “18-year real property or low-income housing,”
for “15-year real property”.
Subsec. (b)(3)(B)(iii). Pub. L. 98-369, Sec. 111(e)(1),
substituted “18-year real property or low-income housing”
for “15-year real property”.
Subsec. (b)(4). Pub.
L. 98-369, Sec. 111(b)(1), added par. (4).
Subsec. (c)(2)(D). Pub. L. 98-369, Sec. 111(b)(3)(B),
amended subpar. (D) generally, substituting “18-year real property”
for “15-year real property” in heading and text and including
within such definition section 1250 property which is not low-income
housing.
Subsec. (c)(2)(F), (G). Pub. L. 98-369, Sec. 111(b)(2),
added subpar. (F) and redesignated former subpar. (F) as (G).
Subsec. (d)(2)(B). Pub.
L. 98-369, Sec. 111(e)(3), substituted “18-year real
property or low-income housing” for “15-year real property”.
Subsec. (e). Pub.
L. 98-369, Sec. 113(b)(2)(A), substituted “title”
for “section” in provision preceding par. (1).
Subsec. (e)(5). Pub.
L. 98-369, Sec. 113(b)(1), added par. (5).
Subsec. (f)(1)(B). Pub.
L. 98-369, Sec. 111(c), designated existing provision as
cl. (i), inserted heading, inserted “, and before March 16,
1984,” and struck out provision that for the purposes of the
preceding sentence, the method of computing the deduction allowable
with respect to such first component be determined as if it were a
separate building, which provision is covered in cl. (iii), and added
cls. (ii) and (iii).
Subsec. (f)(2)(B). Pub.
L. 98-369, Sec. 111(e)(1), substituted “18-year real
property or low-income housing” for “15-year real property”
wherever appearing.
Subsec. (f)(2)(C)(i). Pub. L. 98-369, Sec. 111(e)(4),
substituted in table “18-year real property or low-income housing”
for “15-year real property”.
Subsec. (f)(2)(C)(ii)(II), (E), (5). Pub. L. 98-369, Sec. 111(e)(1),
substituted “18-year real property or low-income housing”
for “15-year real property”.
Subsec. (f)(8)(B)(ii)(I). Pub. L. 98-369, Sec. 12(a)(3)(A),
in par. (8) as amended by section 209(a) of Pub.
L. 97-248, substituted “1990” for “1986”.
Subsec. (f)(12)(C). Pub. L. 98-369, Sec. 628(b)(1),
designated provisions preceding cl. (i) and cl. (i) as subpar. (C),
and struck out cls. (ii), (iii), and (iv) which dealt with the application
of subpar. (A) to a sewage or solid waste disposal facility, an air
or water pollution control facility or a facility which has received
an urban development action grant under section 119 of the Housing
and Community Development Act of 1974.
Subsec. (f)(12)(D), (E). Pub. L. 98-369, Sec. 628(b)(2),
redesignated subpar. (E) as (D) and struck out former subpar. (D)
which read as follows: “For purposes of this paragraph, the
term ‘existing facility’ means a plant or property in operation before
July 1, 1982.”
Subsec. (f)(13). Pub.
L. 98-369, Sec. 32(a), added second par. (13) relating to
motor vehicle operating leases.
Subsec. (f)(14). Pub.
L. 98-369, Sec. 113(a)(2), added par. (14).
Subsec. (g)(2). Pub.
L. 98-369, Sec. 31(d), inserted “If any property (other
than section 1250 class property) does not have a present class life
within the meaning of the preceding sentence, the Secretary may prescribe
a present class life for such property which reasonably reflects the
anticipated useful life of such property to the industry or other
group.”
Subsec. (i)(1)(D)(i). Pub. L. 98-369, Sec. 474(r)(7)(D),
in subsec. (i) as amended by section 209(b) of Pub.
L. 97-248, substituted “subparts A, B, and D of part
IV” for “subpart A of part IV”.
Pub. L. 98-369,
Sec. 474(r)(7)(A), in subsec. (i) as added by section 208(a)(1)
of Pub. L. 97-248, substituted “subparts
A, B, and D of part IV” for “subpart A of part IV”.
Subsec. (i)(1)(D)(iii). Pub. L. 98-369, Sec. 612(e)(5),
in subsec. (i) as amended by section 209(b) of Pub.
L. 97-248, substituted “section 26(b)(2)” for “section
25(b)(2)”.
Pub. L. 98-369,
Sec. 612(e)(4), in subsec. (i) as added by section 208(a)(1)
of Pub. L. 97-248, substituted “section
26(b)(2)” for “section 25(b)(2)”.
Pub. L. 98-369,
Sec. 474(r)(7)(E), in subsec. (i) as amended by section
209(b) of Pub. L. 97-248, substituted “section
25(b)(2)” for “the last sentence of section 53(a)”.
Pub. L. 98-369,
Sec. 474(r)(7)(B), in subsec. (i) as added by section 208(a)(1)
of Pub. L. 97-248, substituted “section
25(b)(2)” for “the last sentence of section 53(a)”.
Subsec. (i)(4)(A). Pub. L. 98-369, Sec. 12(a)(3)(B),
in subsec. (i) as amended by section 209(b) of Pub.
L. 97-248, substituted “1989” for “1985”
in cls. (i) and (ii).
Pub. L. 98-369,
Sec. 474(r)(7)(C), in subsec. (i) as added by section 208(a)(1)
of Pub. L. 97-248, substituted “section
38” for “subpart A of part IV of subchapter A of this
chapter”.
Subsecs. (j), (k). Pub.
L. 98-369, Sec. 31(a), added subsec. (j) and redesignated
former subsec. (j) as (k).
1983 — Subsec. (b)(2)(A). Pub. L. 97-448, Sec. 102(a)(5),
substituted “In the case of 15-year real property” for “For
purposes of this subparagraph” in third sentence.
Subsec. (c)(2)(F). Pub.
L. 97-448, Sec. 102(a)(8), added subpar. (F).
Subsec. (d)(2)(B). Pub.
L. 97-448, Sec. 102(a)(2), substituted “paragraph
(7) or (10) of subsection (f)” for “subsection (f)(7)”.
Subsec. (e)(3)(C), (D). Pub. L. 97-424, Sec. 541(a)(1),
added subpar. (C). Former subpar. (C) redesignated (D).
Subsec. (e)(4)(D). Pub. L. 97-448, Sec. 102(a)(9)(A),
inserted provision that, in the case of the acquisition of property
by any partnership which results from the termination of another partnership
under section 708(b)(1)(B), the determination of whether the acquiring
partnership is related to the other partnership shall be made immediately
before the event resulting in such termination occurs.
Subsec. (e)(4)(H), (I). Pub. L. 97-448, Sec. 102(a)(9)(B),
added subpars. (H) and (I).
Subsec. (f)(4)(B). Pub.
L. 97-448, Sec. 102(f)(4), substituted “Election made
on return” for “Made on return” as the subpar. (B)
heading, designated existing provisions as cl. (i), added heading
for cl. (i), substituted “Except as provided in clause (ii),
any election” for “Any election”, in cl. (i) as
so designated, and added cl. (ii).
Subsec. (f)(5). Pub.
L. 97-448, Sec. 102(a)(1), inserted provision that, in the
case of 15-year real property, the first sentence of this paragraph
shall not apply to the taxable year in which the property is placed
in service or disposed of.
Subsec. (f)(8)(D). Pub. L. 97-448, Sec. 102(a)(10)(A),
amended subpar. (D), as in effect before the amendments made by the
Tax Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-248), is amended by inserting
at end thereof the following new sentence: “Under regulations
prescribed by the Secretary, public utility property shall not be
treated as qualified leased property unless the requirements of rules
similar to the rules of subsection (e)(3) of this section and section
46(f) are met with respect to such property.” See 1982 Amendment
note below for subsec. (f)(8)(D).
Subsec. (f)(13). Pub.
L. 97-448, Sec. 102(a)(3), added par. (13).
Subsec. (g)(8)(A). Pub. L. 97-448, Sec. 102(a)(4)(B),
substituted “Qualified coal utilization property” for “In
general” in heading.
Subsec. (g)(8)(B). Pub. L. 97-448, Sec. 102(a)(4)(C),
substituted “Coal utilization property” for “In
general” in heading.
Subsec. (h)(4). Pub.
L. 97-448, Sec. 102(a)(4)(A), substituted “coal utilization
property which would otherwise be 15-year public utility property”
for “coal utilization property which is not 3-year property,
5-year property, or 10-year property (determined without regard to
this paragraph)”.
1982 — Subsec. (b)(1). Pub. L. 97-248, Sec. 206(a), substituted “table”
for “tables” in introductory provisions, struck out designation “(A)”
preceding the table and struck out subpar. (A) heading which had limited
the application of the table to property placed in service after Dec.
31, 1980, and before Jan. 1, 1985, and struck out subpars. (B) and
(C), which had provided tables, respectively, for property placed
in service in 1985 and for property placed in service after Dec. 31,
1985.
Subsec. (e)(4). Pub.
L. 97-248, Sec. 206(b), 224(c)(1), substituted “1981”
for “1986” in heading, in subpar. (E) inserted provision
that a similar rule shall apply in the case of a deemed liquidation
under section 338, and struck out former subpar. (H) which had provided
for special rules for property placed in service before certain percentages
took effect.
Subsec. (f)(8). Pub.
L. 97-248, Sec. 209(a), amended par. (8) generally, substituting
provisions relating to special rules for finance leases for provisions
relating to special rule for leases.
Subsec. (f)(8)(A). Pub. L. 97-248, Sec. 208(a)(2)(A),
inserted “except as provided in subsection (i),” before “for
purposes of this subtitle”.
Subsec. (f)(8)(B)(i)(I). Pub. L. 97-354, Sec. 5(a)(19),
substituted “an S corporation” for “an electing
small business corporation (within the meaning of section 1371(b))”
in subsec. (f)(8)(B)(i)(I) as in effect before the enactment of the
Tax Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-248).
Pub. L. 97-248,
Sec. 208(b)(1), inserted “which is not a related person
with respect to the lessee”.
Subsec. (f)(8)(B)(iii). Pub. L. 97-248, Sec. 208(b)(2),
in subcl. (I) substituted “120 percent of the present class
life of the property, or” for “90 percent of the useful
life of such property for purposes of section 167, or”, and
in subcl. II substituted “the period equal to the recovery period
determined with respect to such property under subsection (i)(2)”
for “150 percent of the present class life of such property”.
Subsec. (f)(8)(C)(i). Pub. L. 97-354, Sec. 5(a)(20),
in par. (8) as amended by section 209(a) of Pub.
L. 97-248, substituted “an S corporation” for “an
electing small business corporation within the meaning of section
1371(b)”.
Subsec. (f)(8)(D). Pub.
L. 97-248, Sec. 208(b)(3), amended subpar. (D) generally.
Prior to amendment, subpar. (D) read as follows:
“(D) Qualified Leased Property Defined.—For
purposes of subparagraph (A), the term ‘qualified leased property’
means recovery property (other than a qualified rehabilitated building
within the meaning of section 48(g)(1)) which is—
“(i) new section 38 property
(as defined in section 48(b)) of the lessor which is leased within
3 months after such property was placed in service and which, if acquired
by the lessee, would have been new section 38 property of the lessee,
“(ii) property—
“(I) which was new section 38 property of
the lessee,
“(II) which was leased
within 3 months after such property was placed in service by the lessee,
and
“(III) with respect to
which the adjusted basis of the lessor does not exceed the adjusted
basis of the lessee at the time of the lease, or
“(iii) property which
is a qualified mass commuting vehicle (as defined in section 103(b)(9))
and which is financed in whole or in part by obligations the interest
on which is excludable from income under section 103(a).
For purposes of this title (other than this subparagraph),
any property described in clause (i) or (ii) to which subparagraph
(A) applies shall be deemed originally placed in service not earlier
than the date such property is used under the lease. In the case of
property placed in service after December 31, 1980, and before the
date of the enactment of this subparagraph, this subparagraph shall
be applied by submitting ‘the date of the enactment of this subparagraph’
for ‘such property was placed in service’.” See 1983 Amendment
note above for subsec. (f)(8)(D).
Subsec. (f)(8)(H) to (K). Pub. L. 97-248, Sec. 208(b)(4),
added subpars. (H) to (J) and redesignated former subpar. (H) as (K).
Subsec. (f)(10)(B)(i). Pub. L. 97-248, Sec. 224(c)(2),
struck out “(other than a transaction with respect to which
the basis is determined under section 334(b)(2))” after “section
332”.
Subsec. (f)(12). Pub.
L. 97-248, Sec. 216(a), added par. (12).
Subsec. (i). Pub.
L. 97-248, Sec. 209(b), amended subsec. (i) generally, substituting
provisions concerning limitations relating to leases of finance lease
property for provisions concerning limitations relating to lease of
qualified leased property.
Pub. L. 97-248,
Sec. 208(a)(1), added subsec. (i). Former subsec. (i) redesignated
(j).
Subsec. (j). Pub.
L. 97-248, Sec. 208(a)(1), redesignated former subsec. (i)
as (j).
EFFECTIVE DATE OF 2022 AMENDMENTS
Amendments by Pub. L.
117-169, Sec. 13703(a), effective for facilities and property
placed in service after December 31, 2024.
EFFECTIVE DATE OF 2020 AMENDMENTS
Amendment by Pub. L.
116-260, Div. EE, Sec. 115(a), effective for property placed
in service after December 31, 2020.
Amendments by Pub. L.
116-260, Div. EE, Sec. 137(a), effective for property placed
in service after December 31, 2020.
Amendment by Pub. L.
116-260, Div. EE, Sec. 138(a), effective for property placed
in service after December 31, 2020.
Amendments by Pub.
L. 116-136, Sec. 2307 effective as if included in Pub. L. 115-97, Sec. 13204. [Pub. L. 115-97, Sec. 13204(b) effective
for taxable years beginning after December 31, 2017.]
EFFECTIVE DATE OF 2019 AMENDMENTS
Amendments by Pub.
L. 116-94, Sec. 114(a) effective for property placed in
service after Dec. 31, 2017.
Amendment by Pub.
L. 116-94, Sec. 115(a), effective for property placed in
service after Dec. 31, 2017.
Amendment by Pub.
L. 116-94, Sec. 116(a), effective for property placed in
service after Dec. 31, 2017.
Amendment by Pub.
L. 116-94, Sec. 130(a), effective for property placed in
service after Dec. 31, 2017.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L.
115-141, Div. U, Sec. 101(d), effective as if included in
the provision of the Protecting Americans from Tax Hikes Act of 2015
(Sec. 143) to which it relates (effective for property placed in service
after Dec. 31, 2014, in taxable years ending after such date).
Amendments by Pub. L.
115-141, Div. U, Sec. 101(e), effective as if included in
the provision of the Protecting Americans from Tax Hikes Act of 2015
(Sec. 167) to which it relates (effective for property placed in service
after Dec. 31, 2014).
Amendments by Pub. L.
115-141, Div. U, Sec. 302(a), effective for property placed
in service after the date of the enactment of this Act [Enacted: Mar.
23, 2018].
Amendment by Pub. L.
115-141, Div. U, Sec. 401(a), (d), effective March 23, 2018.
Amendment by Pub. L.
115-141, Div. U, Sec. 401(b)(13)(A), effective March 23,
2018, except for property placed in service before the date of the
enactment of this Act [Enacted: March 23, 2018].
Sec. 401(e) of Pub. L.
115-141, Div. U, provided the following Savings Provision:
“(e) General Savings Provision With Respect
To Deadwood Provisions.—If—
“(1) any provision amended or repealed by
the amendments made by subsection (b) or (d) applied to—
“(A) any transaction occurring before the
date of the enactment of this Act,
“(B) any property acquired before such date
of enactment, or
“(C) any item of income, loss, deduction,
or credit taken into account before such date of enactment, and
“(2) the treatment of such transaction, property,
or item under such provision would (without regard to the amendments
or repeals made by such subsection) affect the liability for tax for
periods ending after such date of enactment,
“nothing in the amendments or repeals made
by this section shall be construed to affect the treatment of such
transaction, property, or item for purposes of determining liability
for tax for periods ending after such date of enactment.”
Amendment by Pub. L.
115-123, Sec. 40304(a), effective for property placed in
service after December 31, 2016.
Amendment by Pub. L.
115-123, Sec. 40305(a), effective for property placed in
service after December 31, 2016.
Amendment by Pub. L.
115-123, Sec. 40306(a), effective for property placed in
service after December 31, 2016.
Amendment by Pub. L.
115-123, Sec. 40412(a), effective for property placed in
service after December 31, 2016.
EFFECTIVE DATE OF 2017 AMENDMENTS
Amendment by Pub.
L. 115-97, Sec. 12001(b)(13), effective for taxable years
beginning after December 31, 2017.
Amendments by Pub.
L. 115-97, Sec. 13201, effective for (1) property which
(A) is acquired after September 27, 2017, and (B) is placed in service
after such date, and (2) specified plants planted or grafted after
September 27, 2017. Pub. L. 115-97,
Sec. 13201(h)(1), provided that property shall not be treated
as acquired after the date on which a written binding contract is
entered into for such acquisition.
Amendments by Pub.
L. 115-97, Sec. 13203, effective for property placed in
service after December 31, 2017, in taxable years ending after such
date.
Amendments by Pub.
L. 115-97, Sec. 13204, effective for property placed in
service after December 31, 2017, except that amendments by Pub. L. 115-97, Sec. 13204(a)(3)(A) and
(C), are effective for taxable years beginning after December 31,
2017. Pub. L. 115-97. Sec. 13204(b)(3),
as added by Pub. L. 116-260, Div.
EE, Sec. 202, provided:
“(3) CERTAIN RESIDENTIAL RENTAL PROPERTY.—In
the case of any residential rental property—
“(A) which was placed in service before January
1, 2018,
“(B) which is held by an electing real property
trade or business (as defined in section
163(j)(7)(B) of the Internal Revenue Code of 1986), and
“(C) for which subparagraph (A), (B), (C),
(D), or (E) of section 168(g)(1)
of the Internal Revenue Codeof 1986 did not apply prior
to such date,
“the amendments made by subsection (a)(3)(C)
shall apply to taxable years beginning after December 31, 2017.“
Amendments by Pub.
L. 115-97, Sec. 13205(a), effective for taxable years beginning
after December 31, 2017.
Amendment by Pub.
L. 115-97, Sec. 13504(b)(1), effective for partnership taxable
years beginning after December 31, 2017.
EFFECTIVE DATE OF 2015 AMENDMENTS
Amendments by Pub. L.
114-113, Div. Q, Sec. 123, effective for property placed
in service after December 31, 2014.
Amendments by Pub. L.
114-113, Div. Q, Sec. 143(a)(3), effective taxable years
ending after December 31, 2014.
Amendments by Pub. L.
114-113, Div. Q, Sec. 143(a)(1) and (4), effective for property
placed in service after December 31, 2014, in taxable years ending
after such date.
Amendments by Pub. L.
114-113, Div. Q, Sec. 143(b)(1), (2), (4)(A), (5) and (6),
effective for property placed in service after December 31, 2015,
in taxable years ending after such date.
Amendment by Pub. L.
114-113, Div. Q, Sec. 143(b)(3), effective for taxable years
ending after December 31, 2015, except that in the case of any taxable
year beginning before January 1, 2016, and ending after December 31,
2015, the limitation under section
168(k)(4)(B)(ii) of the Internal Revenue Code of 1986 shall
be the sum of—
“(i) the product of—
“(I) the maximum increase amount (within
the meaning of section 168(k)(4)(C)(iii) of such Code, as in effect
before the amendments made by Act section 143(b)), multiplied by
“(II) a fraction the numerator of which is
the number of days in the taxable year before January 1, 2016, and
the denominator of which is the number of days in the taxable year,
plus
“(ii) the product of—
“(I) such limitation (determined without
regard to this subparagraph), multiplied by
“(II) a fraction the numerator of which is
the number of days in the taxable year after December 31, 2015, and
the denominator of which is the number of days in the taxable year.”
Amendment by Pub. L.
114-113, Div. Q, Sec. 143(b)(4)(B), effective for specified
plants (as defined in section
168(k)(5)(B) of the Internal Revenue Code of 1986) planted
or grafted after December 31, 2015.
Amendments by Pub. L.
114-113, Div. Q, Sec. 165, effective for property placed
in service after December 31, 2014.
Amendment by Pub. L.
114-113, Div. Q, Sec. 166(a), effective for property placed
in service after December 31, 2014.
Amendment by Pub. L.
114-113, Div. Q, Sec. 167(a), effective for property placed
in service after December 31, 2014.
Amendment by Pub. L.
114-113, Div. Q, Sec. 167(b), effective for property placed
in service after December 31, 2015.
Amendment by Pub. L.
114-113, Div. Q, Sec. 189(a), effective for property placed
in service after December 31, 2014.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L.
113-295, Div. A, Sec. 121, 122, 123, and 124 effective for
property placed in service after December 31, 2013.
Amendments by Pub. L.
113-295, Div. A, Sec. 125, effective for property placed
in service after December 31, 2013, in taxable years ending after
such date.
Amendment by Pub. L.
113-295, Div. A, Sec. 157, effective for property placed
in service after December 31, 2013.
Amendment by Pub. L.
113-295, Div. A, Sec. 202(e), effective as if included in
the provisions of the American Taxpayer Relief Act of 2012 [Pub. L. 112-240, Sec. 331] to which
it relates [Effective for property placed in service after December
31, 2012, in taxable years ending after such date].
Amendments by Pub. L.
113-295, Div. A, Sec. 210(c), effective as if included in
the provisions of the Energy Improvement and Extension Act of 2008
[Pub. L. 110-343, Div. B, Sec.
306] to which they relate [Effective for property placed in service
after Oct. 3, 2008].
Amendments by Pub. L.
113-295, Div. A, Sec. 210(d), effective as if included in
the provisions of the Energy Improvement and Extension Act of 2008
[Pub. L. 110-343, Div. B, Sec.
308] to which they relate [Effective for property placed in service
after August 31, 2008].
Amendments by Pub. L.
113-295, Div. A, Sec. 210(g)(2), effective as if included
in the provisions of the Energy Improvement and Extension Act of 2008
[Pub. L. 110-343, Div. B, Sec.
306] to which they relate [Effective for property placed in service
after Oct. 3, 2008].
Amendments by Pub. L.
113-295, Div. A, Sec. 211(b), effective as if included in
the provisions of the Tax Extenders and Alternative Minimum Tax Relief
Act of 2008 to which they relate.
Amendment by Pub. L.
113-295, Div. A, Sec. 212(b), effective as if included in
the provision of the Housing Assistance Tax Act of 2008 to which it
relates.
Amendment by Pub. L.
113-295, Div. A, Sec. 214(b), effective as if included in
the provision of the Economic Stimulus Act of 2008 to which it relates.
EFFECTIVE DATE OF 2013 AMENDMENTS
Amendments by Sec. 311 of Pub.
L. 112-240 effective for property placed in service after
December 31, 2011.
Amendments by Sec. 312 of Pub.
L. 112-240 effective for property placed in service after
December 31, 2011.
Amendments by Sec. 331 of Pub.
L. 112-240 effective for property placed in service after
December 31, 2012, in taxable years ending after such date.
Amendments by Sec. 410(a) of Pub. L. 112-240 effective for property
placed in service after December 31, 2012.
Amendments by Sec. 410(b) of Pub. L. 112-240 effective for property
placed in service after the date of the enactment of this Act [Enacted:
Jan. 2, 2013].
EFFECTIVE DATE OF 2010 AMENDMENTS
Amendments by Sec. 401(a), (c)–(d) of Pub. L. 111-312 effective for property
placed in service after December 31, 2010, in taxable years ending
after such date.
Amendments by Sec. 401(b) of Pub. L. 111-312 effective for property
placed in service after September 8, 2010, in taxable years ending
after such date.
Amendments by Sec. 737 of Pub.
L. 111-312 effective for property placed in service after
December 31, 2009.
Amendment by Sec. 738(a) of Pub.
L. 111-312 effective for property placed in service after
December 31, 2009.
Amendment by Sec. 739(a) of Pub.
L. 111-312 effective for property placed in service after
December 31, 2009.
Amendments by Sec. 2022 of Pub.
L. 111-240 effective for property placed in service after
December 31, 2009, in taxable years ending after such date.
EFFECTIVE DATE OF 2009 AMENDMENTS
Amendments by Div. B, Sec. 1201 (except for subsections
(a)(3) and (b)(2)), of Pub. L. 111-5 effective
for property placed in service after December 31, 2008, in taxable
years ending after such date. Amendments made by subsections (a)(3)
and (b)(2) are effective for taxable years ending after March 31,
2008.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Div. B, Sec. 201 of Pub. L. 110-343 effective for property
placed in service after the date of the enactment of this Act [Enacted:
Oct. 3, 2008], in taxable years ending after such date..
Amendments by Div. B, Sec. 306 of Pub. L. 110-343 effective for property
placed in service after the date of the enactment of this Act [Enacted:
Oct. 3, 2008].
Amendment by Div. B, Sec. 308(a) of Pub. L. 110-343 effective for property
placed in service after August 31, 2008.
Amendments by Div. C, Sec. 305(a) of Pub. L. 110-343 effective for property
placed in service after December 31, 2007.
Amendments by Div. C, Sec. 305(b) of Pub. L. 110-343 effective for property
placed in service after December 31, 2008.
Amendments by Div. C, Sec. 305(c) of Pub. L. 110-343 effective for property
placed in service after December 31, 2008.
Amendment by Div. C, Sec. 315(a) of Pub. L. 110-343 effective for property
placed in service after December 31, 2007.
Amendment by Div. C, Sec. 317(a) of Pub. L. 110-343 effective for property
placed in service after December 31, 2007.
Amendments by Div. C, Sec. 505 of Pub. L. 110-343 effective for property
placed in service after December 31, 2008.
Amendment by Div. C, Sec. 710 of Pub. L. 110-343 effective for property
placed in service after December 31, 2007, with respect to disasters
declared after such date.
Amendment by Sec. 3081(a) of Pub. L. 110-289 effective for taxable years
ending after March 31, 2008. Sec. 3081(b) of Pub.
L. 110-289 provided the following special rule:
“(b) Application To Certain Automotive Partnerships.—
“(1) In General.—If an applicable partnership
elects the application of this subsection—
“(A) the partnership shall be treated as
having made a payment against the tax imposed by chapter 1 of the Internal Revenue Code of 1986
for any applicable taxable year of the partnership in the amount determined
under paragraph (3),
“(B) in the case of any eligible qualified
property placed in service by the partnership during any applicable
taxable year—
“(i) section 168(k) of such Code shall not
apply in determining the amount of the deduction allowable with respect
to such property under section 168 of such Code,
“(ii) the applicable depreciation method
used with respect to such property shall be the straight line method,
and
“(C) the amount of the credit determined
under section 41 of such Code for any applicable taxable year with
respect to the partnership shall be reduced by the amount of the deemed
payment under subparagraph (A) for the taxable year.
“(2) Treatment Of Deemed Payment.—
“(A) In General.—Notwithstanding any
other provision of the Internal Revenue Code of 1986, the Secretary
of the Treasury or his delegate shall not use the payment of tax described
in paragraph (1) as an offset or credit against any tax liability
of the applicable partnership or any partner but shall refund such
payment to the applicable partnership.
“(B) No Interest.—The payment described
in paragraph (1) shall not be taken into account in determining any
amount of interest under such Code.
“(3) Amount Of Deemed Payment.—The
amount determined under this paragraph for any applicable taxable
year shall be the least of the following:
“(A) The amount which would be determined
for the taxable year under section
168(k)(4)(C)(i) of the Internal Revenue Code of 1986 (as
added by the amendments made by this section) if an election under
section 168(k)(4) of such Code were in effect with respect to the
partnership.
“(B) The amount of the credit determined
under section 41 of such Code for the taxable year with respect to
the partnership.
“(C) $30,000,000, reduced by the amount of
any payment under this subsection for any preceding taxable year.
“(4) Definitions.—For purposes of this
subsection—
“(A) Applicable Partnership.—The term ‘applicable
partnership' means a domestic partnership that—
“(i) was formed effective on August 3, 2007,
and
“(ii) will produce in excess of 675,000 automobiles
during the period beginning on January 1, 2008, and ending on June
30, 2008.
“(B) Applicable Taxable Year.—The term ‘applicable
taxable year' means any taxable year during which eligible qualified
property is placed in service.
“(C) Eligible Qualified Property.—
The term ‘eligible qualified property' has the meaning given
such term by section 168(k)(4)(D)
of the Internal Revenue Code of 1986 (as added by the amendments
made by this section).”
Amendment by Sec. 15344(a) of Pub. L. 110-246 effective for property
placed in service after December 31, 2008.
Amendments by Sec. 103 of Pub.
L. 110-185 effective for property placed in service after
December 31, 2007, in taxable years ending after such date.
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendment by Sec. 11(b)(1) of Pub. L. 110-172 effective as if included
in the provision of the Tax Relief and Health Care Act of 2006 [Pub. L. 109-432, Div. A, Sec. 209] to which
it relates.
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendment by Sec. 112(a) of Pub.
L. 109-432 effective for property placed in service after
December 31, 2005.
Amendments by Sec. 113(a) of Pub. L. 109-432 effective for property
placed in service after December 31, 2005.
Amendment by Sec. 209(a) of Pub.
L. 109-432 effective for property placed in service after
the date of the enactment of this Act [Enacted: Dec. 20, 2006] in
taxable years ending after such date.
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendments by Sec. 403(j) of Pub. L. 109-135 effective as if included
in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 336] to which
they relate.
Amendment by Sec. 405(a)(1) of Pub. L. 109-135 effective as if included
in the provisions of the Jobs Growth and Tax Relief Reconciliation
Act of 2003 [Pub. L. 108-27, Sec. 201]
to which it relates.
Amendment by Sec. 410(a) of Pub.
L. 109-35 effective as if included in the provisions of
the Omnibus Budget Reconciliation Act of 1990 [Pub. 101-508, Sec.
11813] to which it relates.
Amendments by Sec. 412(s) of Pub. L. 109-135 effective on the date of
the enactment of this Act [Enacted: Dec. 21, 2005].
Amendment by Sec. 1301(f)(5) of Pub. L. 109-58 effective as if included
in the amendments made by section 710 of the American Jobs Creation
Act of 2004 [Pub. L. 108-357].
Amendments by Sec. 1308 of Pub.
L. 109-58 effective for property placed in service after
April 11, 2005, except for any property with respect to which the
taxpayer or a related party has entered into a binding contract for
the construction thereof on or before April 11, 2005, or, in the case
of self-constructed property, has started construction on or before
such date.
Amendments by Sec. 1325 of Pub.
L. 109-58 effective for property placed in service after
April 11, 2005, except for any property with respect to which the
taxpayer or a related party has entered into a binding contract for
the construction thereof on or before April 11, 2005, or, in the case
of self-constructed property, has started construction on or before
such date.
Amendments by Sec. 1326 of Pub.
L. 109-58 effective for property placed in service after
April 11, 2005, except for any property with respect to which the
taxpayer or a related party has entered into a binding contract for
the construction thereof on or before April 11, 2005, or, in the case
of self-constructed property, has started construction on or before
such date.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 211 of Pub.
L. 108-357 effective for property placed in service after
the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendments by Sec. 336 of Pub.
L. 108-357 effective as if included in the amendments made
by section 101 of the Job Creation and Worker Assistance Act of 2002
[Effective date: property placed in service after September 10, 2001,
in taxable years ending after such date].
Amendments by Sec. 337 of Pub.
L. 108-357 effective for property sold after June 4, 2004.
Amendments by Sec. 704 of Pub.
L. 108-357 effective for property placed in service after
the date of the enactment of this Act [Enacted: Oct. 22, 2004]. Sec.
704(c)(2)–(3) provided the following special rules:
“(2) Special Rule For Asset Class 80.0.—In
the case of race track facilities placed in service after the date
of the enactment of this Act, such facilities shall not be treated
as theme and amusement facilities classified under asset class 80.0.
“(3) No Inference.—Nothing in this
section or the amendments made by this section shall be construed
to affect the treatment of property placed in service on or before
the date of the enactment of this Act.”
Amendments by Sec. 706 of Pub.
L. 108-357 effective for property placed in service after
December 31, 2004.
Pub. L. 108-357,
Sec. 849(a), as amended by Pub.
L. 109-135, Sec. 403(ff), provided that “Except as
provided in this section, the amendments made by this part [Sec. 847
and 848] shall apply to leases entered into after March 12, 2004,
and in the case of property treated as tax-exempt use property other
than by reason of a lease, to property aquired after March 12, 2004.”
Sec. 849(b) of Pub. L. 108-357 provided
the following rules:
“(b) Exception.—
“(1) In General.—The amendments made
by this part shall not apply to qualified transportation property.
“(2) Qualified Transportation Property.—For
purposes of paragraph (1), the term ‘qualified transportation property’
means domestic property subject to a lease with respect to which a
formal application—
“(A) was submitted for approval to the Federal
Transit Administration (an agency of the Department of Transportation)
after June 30, 2003, and before March 13, 2004,
“(B) is approved by the Federal Transit Administration
before January 1, 2006, and
“(C) includes a description of such property
and the value of such property.
“(3) Exchanges And Conversion Of Tax-Exempt
Use Property.—Section 470(e)(4)
of the Internal Revenue Code of 1986, as added by section
848, shall apply to property exchanged or converted after the date
of the enactment of this Act.
“(4) Intangibles And Indian Tribal Governments.—The
amendments made subsections (b)(2), (b)(3), and (e) of section 847,
and the treatment of property described in clauses (ii) and (iii)
of section 470(c)(2)(B) of the
Internal Revenue Codeof 1986 (as added by section 848)
as tangible property, shall apply to leases entered into after October
3, 2004.”
Amendments by Sec. 901 of Pub.
L. 108-357 effective for property placed in service after
the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by Sec. 316 of Pub.
L. 108-311 effective on the date of the enactment of this
Act [Enacted: Oct. 4, 2004].
Amendments by Sec. 403(a) of Pub. L. 108-311 effective as if included
in the provisions of the Job Creation and Worker Assistance Act of
2002 [Sec. 101] to which they relate [effective date: property placed
in service after Sept. 10, 2001, in taxable years ending after such
date].
Amendments by Sec. 408(a) of Pub. L. 108-311 effective on the date of
the enactment of this Act [Enacted: Oct. 4, 2004].
EFFECTIVE DATE OF 2003 AMENDMENTS
Amendment by Sec. 201 of Pub.
L. 108-27 effective for taxable years ending after May 5,
2003.
EFFECTIVE DATE OF 2002 AMENDMENTS
Amendment by Sec. 101(a) of Pub.
L. 107-147 effective for property placed in service after
September 10, 2001, in taxable years ending after such date.
Amendment by Sec. 613(b) of Pub.
L. 107-147 effective on the date of the enactment of this
Act [Enacted: Mar. 9, 2002].
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 6006(b) of Pub. L. 105-206 effective as if included
in the provisions of the Taxpayer Relief Act of 1997 to which they
relate [Effective Date of Pub. L. 105-34,
Sec. 402: Aug. 5, 1997].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 1086(b) of Pub. L. 105-34 effective for property placed
in service after the date of the enactment of this Act [Aug. 5, 1997].
Amendment by Sec. 1213(c) of Pub.
L. 105-34 effective for leases entered into after the date
of the enactment of this Act [Aug. 5, 1997].
Amendment by Sec. 1604(c)(1) of Pub. L. 105-34 effective as if included
in the amendments made by section 13321 of the Omnibus Budget Reconciliation
Act of 1993, except that such amendment shall not apply—
(A) with respect to property (with an applicable
recovery period under section 168(j)
of the Internal Revenue Codeof 1986 of 6 years or less)
held by the taxpayer if the taxpayer claimed the benefits of section
168(j) of such Code with respect to such property on a return filed
before March 18, 1997, but only if such return is the first return
of tax filed for the taxable year in which such property was placed
in service, or
(B) with respect to wages for which the taxpayer
claimed the benefits of section 45A of such Code for a taxable year
on a return filed before March 18, 1997, but only if such return was
the first return of tax filed for such taxable year [Aug. 5, 1997].
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 1120(c) of Pub.
L. 104-188 provided that: “The amendments made by
this section shall apply to property which is placed in service on
or after the date of the enactment of this Act [Aug. 20, 1996] and
to which section 168 of the Internal Revenue
Code of 1986 applies after the amendment made by section
201 of the Tax Reform Act of 1986. A taxpayer may elect (in such form
and manner as the Secretary of the Treasury may prescribe) to have
such amendments apply with respect to any property placed in service
before such date and to which such section so applies.”
Amendment by section 1121(a) of Pub. L. 104-188 applicable to improvements
disposed of or abandoned after June 12, 1996.
Section 1613(b)(5) of Pub.
L. 104-188 provided that: “The amendments made by
this subsection shall apply to property placed in service after June
12, 1996, other than property placed in service pursuant to a binding
contract in effect before June 10, 1996, and at all times thereafter
before the property is placed in service.”
Amendments by section 1702(i) of Pub. L. 104-188, except as otherwise expressly
provided, effective as if included in the related provision of the
Revenue Reconciliation Act of 1990.
EFFECTIVE DATE OF 1995 AMENDMENTS
Amendment by section 304 of Pub.
L. 104-88 effective January 1, 1996.
EFFECTIVE DATE OF 1993 AMENDMENTS
Amendment by section 13151(a) of Pub. L. 103-66 effective for property placed
in service by the taxpayer on or after May 13, 1993. Sec. 13151(b)(2)
provides:
“(2) Exception.—The
amendments made by this section shall not apply to property placed
in service by the taxpayer before January 1, 1994, if —
“(A) the taxpayer or a
qualified person entered into a binding written contract to purchase
or construct such property before May 13, 1993, or
“(B) the construction
of such property was commenced by or for the taxpayer or a qualified
person before May 13, 1993.
“For purposes of this paragraph, the term ‘qualified
person' means any person who transfers his rights in such a contract
or such property to the taxpayer but only if the property is not placed
in service by such person before such rights are transferred to the
taxpayer.”
Amendment by section 13321(a) of Pub. L. 103-66 effective for property placed
in service after December 31, 1993.
EFFECTIVE DATE OF 1990 AMENDMENTS
Amendment by section 11812(b) (2) of Pub. L. 101-508 applicable to property
placed in service after Nov. 5, 1990, but not applicable to any property
to which section 168 of this title does not apply by reason of subsec.
(f)(5) of section 168, and not applicable to rehabilitation expenditures
described in section 252(f)(5) of Pub. L.
99-514, see section 11812(c) of Pub.
L. 101-508, set out as a note under section 42 of this title.
Amendment by section 11813(b)(9) of Pub. L. 101-508 applicable to property
placed in service after Dec. 31, 1990, but not applicable to any transition
property (as defined in section 49(e) of this title), any property
with respect to which qualified progress expenditures were previously
taken into account under section 46(d) of this title, and any property
described in section 46(b)(2)(C) of this title, as such sections were
in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101-508, set out as a note under
section 29 of this title.
EFFECTIVE DATE OF 1989 AMENDMENTS
Amendment by Pub. L.
101-239 effective, except as otherwise provided, as if included
in the provision of the Technical and Miscellaneous Revenue Act of
1988, Pub. L. 100-647, to which
such amendment relates, see section 7817 of Pub.
L. 101-239, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENTS
Section 1002(a)(23)(B) of Pub.
L. 100-647 provided that: “Clause (ii) of section
168(d)(3)(B) of the 1986 Code (as added by subparagraph (A)) shall
apply to taxable years beginning after March 31, 1988, unless the
taxpayer elects, at such time and in such manner as the Secretary
of the Treasury or his delegate may prescribe, to have such clause
apply to taxable years beginning on or before such date.”
Amendment by sections 1002(a)(5)–(8), (11),
(16)(B), (21), (i)(2)(A)–(G), and 1018(b)(2) of Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which
such amendment relates, see section 1019(a) of Pub.
L. 100-647, set out as a note under section 1 of this title.
Section 6027(c) of Pub.
L. 100-647 provided that:
“(1) In General.—Except as provided
in paragraph (2), the amendments made by this section (amending this
section) shall apply to property placed in service after December
31, 1988.
“(2) Exception.—The amendments made
by this section shall not apply to any property if such property is
placed in service before January 1, 1990, and if such property—
“(A) is constructed, reconstructed,
or acquired by the taxpayer pursuant to a written contract which was
binding on July 14, 1988, or
“(B) is constructed or
reconstructed by the taxpayer and such construction or reconstruction
began by July 14, 1988.”
Section 6028(b) of Pub.
L. 100-647 provided that:
“(1) In General.—Except as provided
in paragraph (2), the amendments made by this section (amending this
section) shall apply to property placed in service after December
31, 1988.
“(2) Exception.—The amendments made
by this section shall not apply to any property if such property is
placed in service before July 1, 1989, and if such property—
“(A) is constructed, reconstructed,
or acquired by the taxpayer pursuant to a written contract which was
binding on July 14, 1988, or
“(B) is constructed or
reconstructed by the taxpayer and such construction or reconstruction
began by July 14, 1988.”
Section 6029(d) of Pub.
L. 100-647 provided that: “The amendments made by
this section (amending this section) shall apply to property placed
in service after December 31, 1988.”
EFFECTIVE DATE OF 1986 AMENDMENT; TRANSITIONAL
RULES
Sections 203 and 204 of Pub.
L. 99-514, as amended by Pub. L.
99-509, title VIII, Sec. 8071, Oct. 21, 1986, 100 Stat. 1964; Pub.
L. 100-647, title I, Sec. 1002(c)(1), (2), (4)–(8),
(d)(1)–(7)(A), (8)–(35), Nov. 10, 1988, 102 Stat. 3358-3367, provided:
“Sec. 203. Effective Dates; General Transitional
Rules.—
“(a) General Effective Dates.—
“(1) Section 201.—
“(A) In General.—Except
as provided in this section, section 204, and section 251(d) (set
out as a note under section 46 of this title), the amendments made
by section 201 (amending sections 46, 167, 168, 178, 179, 280F, 291,
312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title)
shall apply to property placed in service after December 31, 1986,
in taxable years ending after such date.
“(B) Election To Have
Amendments Made By Section 201 Apply.—A taxpayer may elect (at
such time and in such manner as the Secretary of the Treasury or his
delegate may prescribe) to have the amendments made by section 201
apply to any property placed in service after July 31, 1986, and before
January 1, 1987. No election may be made under this subparagraph with
respect to property to which section 168
of the Internal Revenue Code of 1986 would not apply by
reason of section 168(f)(5) of such Code if such property were placed
in service after December 31, 1986.
“(2) Section 202.—
“(A) In General.—The
amendments made by section 202 (amending section 179 of this title)
shall apply to property placed in service after December 31, 1986,
in taxable years ending after such date.
“(B) Special Rule For Fiscal Years Including
January 1, 1987.—In the case of any taxable year (other than
a calendar year) which includes January 1, 1987, for purposes of applying
the amendments made by section 202 to property placed in service during
such taxable year and after December 31, 1986—
“(i) the limitation of section 179(b)(1) of the Internal Revenue Code of
1986 (as amended by section 202) shall be reduced by the aggregate
deduction under section 179 (as in effect on the day before the date
of the enactment of the Tax Reform Act of 1986 (Oct. 22, 1986)) for
section 179 property placed in service during such taxable year and
before January 1, 1987,
“(ii) the limitation of
section 179(b)(2) of such Code (as so amended) shall be applied by
taking into account the cost of all section 179 property placed in
service during such taxable year, and
“(iii) the limitation
of section 179(b)(3) of such Code shall be applied by taking into
account the taxable income for the entire taxable year reduced by
the amount of any deduction under section 179 of such Code for property
placed in service during such taxable year and before January 1, 1987.
“(b) General Transitional Rule.—
“(1) In General.—The
amendments made by section 201 (amending sections 46, 167, 168, 178,
179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701
of this title) shall not apply to
“(A) any property which
is constructed, reconstructed, or acquired by the taxpayer pursuant
to a written contract which was binding on March 1, 1986,
“(B) property which is
constructed or reconstructed by the taxpayer if—
“(i) the lesser of (I)
$1,000,000, or (II) 5 percent of the cost of such property has been
incurred or committed by March 1, 1986, and
“(ii) the construction
or reconstruction of such property began by such date, or
“(C) an equipped building
or plant facility if construction has commenced as of March 1, 1986,
pursuant to a written specific plan and more than one-half of the
cost of such equipped building or facility has been incurred or committed
by such date. For purposes of this paragraph, all members of the same
affiliated group of corporations (within the meaning of section 1504 of the Internal Revenue Code of
1986) filing a consolidated return shall be treated as one taxpayer.
“(2) Requirement That
Certain Property Be Placed In Service Before Certain Date.—
“(A) In General.—Paragraph
(1) and section 204(a) (other than paragraph (8) or (12) thereof)
shall not apply to any property unless such property has a class life
of at least 7 years and is placed in service before the applicable
date determined under the following table: ---------------------------------------------------------------------
---------------------------------------------------------------------
‘In the case of property The applicable with a class life of: date is: At least 7 but less than 20 years January 1, 1989 20 years or more January 1, 1991. -------------------------------
“(B) Residential rental
and nonresidential real property.—In the case of residential
rental property and nonresidential real property, the applicable date
is January 1, 1991.
“(C) Class lives.—For purposes of subparagraph
(A)—
“(i) the class life of
property to which section 168(g)(3)(B)
of the Internal Revenue Code of 1986 (as added by section
201) applies shall be the class life in effect on January 1, 1986,
except that computer-based telephone central office switching equipment
described in section 168(e)(3)(B)(iii) of such Code shall be treated
as having a class life of 6 years,
“(ii) property described
in section 204(a) shall be treated as having a class life of 20 years,
and
“(iii) property with no
class life shall be treated as having a class life of 12 years.
“(D) Substitution Of Applicable
Dates.—If any provision of this Act (see Tables for classification)
substitutes a date for an applicable date, this paragraph shall be
applied by using such date.
“(3) Property Qualifies
If Sold And Leased Back In 3 Months.—Property shall be treated
as meeting the requirements of paragraphs (1) and (2) or section 204(a)
with respect to any taxpayer if such property is acquired by the taxpayer
from a person—
“(A) in whose hands such
property met the requirements of paragraphs (1) and (2) or section
204(a) (or would have met such requirements if placed in service by
such person), or
“(B) who placed the property
in service before January 1, 1987, and such property is leased back
by the taxpayer to such person, or is leased to such person, not later
than the earlier of the applicable date under paragraph (2) or the
day which is 3 months after such property was placed in service.
“(4) Plant Facility.—For
purposes of paragraph (1), the term ‘plant facility’ means a facility
which does not include any building (or with respect to which buildings
constitute an insignificant portion) and which is—
“(A) a self-contained
single operating unit or processing operation,
“(B) located on a single site, and
“(C) identified as a single
unitary project as of March 1, 1986.
“(c) Property Financed With Tax-Exempt Bonds.—
“(1) In General.—Except
as otherwise provided in this subsection or section 204, subparagraph
(C) of section 168(g)(1) of the Internal
Revenue Code of 1986 (as added by this Act) shall apply
to property placed in service after December 31, 1986, in taxable
years ending after such date, to the extent such property is financed
by the proceeds of an obligation (including a refunding obligation)
issued after March 1, 1986.
“(2) Exceptions.—
“(A) Construction or Binding
Agreements.—Subparagraph (C) of section 168(g)(1) of such Code
(as so added) shall not apply to obligations with respect to a facility—
“(i)(I) the original use
of which commences with the taxpayer, and the construction, reconstruction,
or rehabilitation of which began before March 2, 1986, and was completed
on or after such date,
“(II) with respect to which a binding contract
to incur significant expenditures for construction, reconstruction,
or rehabilitation was entered into before March 2, 1986, and some
of such expenditures are incurred on or after such date, or
“(III) acquired on or after March 2, 1986,
pursuant to a binding contract entered into before such date, and
“(ii) described in an
inducement resolution or other comparable preliminary approval adopted
by the issuing authority (or by a voter referendum) before March 2,
1986.
“(B) Refunding.—
“(i) In General.—Except
as provided in clause (ii), in the case of property placed in service
after December 31, 1986, which is financed by the proceeds of an obligation
which is issued solely to refund another obligation which was issued
before March 2, 1986, subparagraph (C) of section 168(g)(1) of such
Code (as so added) shall apply only with respect to an amount equal
to the basis in such property which has not been recovered before
the date such refunded obligation is issued.
“(ii) Significant Expenditures.—In
the case of facilities the original use of which commences with the
taxpayer and with respect to which significant expenditures are made
before January 1, 1987, subparagraph (C) of section 168(g)(1) of such
Code (as so added) shall not apply with respect to such facilities
to the extent such facilities are financed by the proceeds of an obligation
issued solely to refund another obligation which was issued before
March 2, 1986.
“(C) Facilities.—In
the case of an inducement resolution or other comparable preliminary
approval adopted by an issuing authority before March 2, 1986, for
purposes of subparagraphs (A) and (B)(ii) with respect to obligations
described in such resolution, the term ‘facilities' means the
facilities described in such resolution.
“(D) Significant Expenditures.—For
purposes of this paragraph, the term ‘significant expenditures’ means
expenditures greater than 10 percent of the reasonably anticipated
cost of the construction, reconstruction, or rehabilitation of the
facility involved.
“(d) Mid-Quarter Convention.—In the
case of any taxable year beginning before October 1, 1987 in which
property to which the amendments made by section 201 (amending sections
46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245,
4162, 6111, and 7701 of this title) do not apply is placed in service,
such property shall be taken into account in determining whether section 168(d)(3) of the Internal Revenue Code of
1986 (as added by section 201) applies for such taxable year to property
to which such amendments apply. The preceding sentence shall only
apply to property which would be taken into account if such amendments
did apply.
“(e) Normalization Requirements.—
“(1) In General.—A
normalization method of accounting shall not be treated as being used
with respect to any public utility property for purposes of section
167 or 168 of the Internal Revenue Code of
1986 if the taxpayer, in computing its cost of service for ratemaking
purposes and reflecting operating results in its regulated books of
account, reduces the excess tax reserve more rapidly or to a greater
extent than such reserve would be reduced under the average rate assumption
method.
“(2) Definitions.—For purposes of this
subsection—
“(A) Excess Tax Reserve.—The term ‘excess
tax reserve’ means the excess of—
“(i) the reserve for deferred
taxes (as described in section 167(l)(3)(G)(ii) or (ii) of the Internal
Revenue Code of 1954 as in effect on the day before the date of the
enactment of this Act (Oct. 22, 1986)), over
“(ii) the amount which
would be the balance in such reserve if the amount of such reserve
were determined by assuming that the corporate rate reductions provided
in this Act (see Tables for classification) were in effect for all
prior periods.
“(B) Average Rate Assumption
Method.—The average rate assumption method is the method under
which the excess in the reserve for deferred taxes is reduced over
the remaining lives of the property as used in its regulated books
of account which gave rise to the reserve for deferred taxes. Under
such method, if timing differences for the property reverse, the amount
of the adjustment to the reserve for the deferred taxes is calculated
by multiplying—
“(i) the ratio of the
aggregate deferred taxes for the property to the aggregate timing
differences for the property as of the beginning of the period in
question, by
“(ii) the amount of the
timing differences which reverse during such period.
“Sec. 204. Additional Transitional Rules.
“(a) Other Transitional Rules.—
“(1) Urban Renovation Projects.—
“(A) In General.—The
amendments made by section 201 (amending sections 46, 167, 168, 178,
179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701
of this title) shall not apply to any property which is an integral
part of any qualified urban renovation project.
“(B) Qualified Urban Renovation
Project.—For purposes of subparagraph (A), the term ‘qualified
urban renovation project’ means any project—
“(i) described in subparagraph
(C), (D), (E), or (G) which before March 1, 1986, was publicly announced
by a political subdivision of a State for a renovation of an urban
area within its jurisdiction,
“(ii) described in subparagraph
(C), (D) or (G) which before March 1, 1986, was identified as a single
unitary project in the internal financing plans of the primary developer
of the project,
“(iii) described in subparagraph
(C) or (D), which is not substantially modified on or after March
1, 1986, and
“(iv) described in subparagraph (F) or (H).
“(C) Project Where Agreement
On December 19, 1984.—A project is described in this subparagraph
if—
“(i) a political subdivision
granted on July 11, 1985, development rights to the primary developer-purchaser
of such project, and
“(ii) such project was
the subject of a development agreement between a political subdivision
and a bridge authority on December 19, 1984.
For purposes of this subparagraph, section 203(b)(2)
shall be applied by substituting ‘January 1, 1994’ for ‘January 1,
1991’ each place it appears.
“(D) Certain Additional
Projects.—A project is described in this subparagraph if it
is described in any of the following clauses of this subparagraph
and the primary developer of all such projects is the same person:
“(i) A project is described
in this clause if the development agreement with respect thereto was
entered into during April 1984 and the estimated cost of the project
is approximately $194,000,000.
“(ii) A project is described
in this clause if the development agreement with respect thereto was
entered into during May 1984 and the estimated cost of the project
is approximately $190,000,000.
“(iii) A project is described
in this clause if the project has an estimated cost of approximately
$92,000,000 and at least $7,000,000 was spent before September 26,
1985, with respect to such project.
“(iv) A project is described
in this clause if the estimated project cost is approximately $39,000,000
and at least $2,000,000 of construction cost for such project were
incurred before September 26, 1985.
“(v) A project is described
in this clause if the development agreement with respect thereto was
entered into before September 26, 1985, and the estimated cost of
the project is approximately $150,000,000.
“(vi) A project is described
in this clause if the board of directors of the primary developer
approved such project in December 1982, and the estimated cost of
such project is approximately $107,000,000.
“(vii) A project is described
in this clause if the board of directors of the primary developer
approved such project in December 1982, and the estimated cost of
such project is approximately $59,000,000.
“(viii) A project is described
in this clause if the Board of Directors of the primary developer
approved such project in December 1983, following selection of the
developer by a city council on September 26, 1983, and the estimated
cost of such project is approximately $107,000,000.
“(E) Project Where Plan
Confirmed On October 4, 1984.—A project is described in this
subparagraph if—
“(i) a State or an agency,
instrumentality, or political subdivision thereof approved the filing
of a general project plan on June 18, 1981, and on October 4, 1984,
a State or an agency, instrumentality, or political subdivision thereof
confirmed such plan,
“(ii) the project plan
as confirmed on October 4, 1984, included construction or renovation
of office buildings, a hotel, a trade mart, theaters, and a subway
complex, and
“(iii) significant segments
of such project were the subject of one or more conditional designations
granted by a State or an agency, instrumentality, or political subdivision
thereof to one or more developers before January 1, 1985. The preceding
sentence shall apply with respect to a property only to the extent
that a building on such property site was identified as part of the
project plan before September 26, 1985, and only to the extent that
the size of the building on such property site was not substantially
increased by reason of a modification to the project plan with respect
to such property on or after such date. For purposes of this subparagraph,
section 203(b)(2) shall be applied by substituting ‘January 1, 1998’
for ‘January 1, 1991’ each place it appears.
“(F) A project is described
in this subparagraph if it is a sports and entertainment facility
which—
“(i) is to be used by
both a National Hockey League team and a National Basketball Association
team;
“(ii) is to be constructed
on a platform utilizing air rights over land acquired by a State authority
and identified as site B in a report dated May 30, 1984, prepared
for a State urban development corporation; and
“(iii) is eligible for
real property tax, and power and energy benefits pursuant to the provisions
of State legislation approved and effective July 7, 1982.A project
is also described in this subparagraph if it is a mixed-use development
which is—
“(I) to be constructed above a public railroad
station utilized by the national railroad passenger corporation and
commuter railroads serving two States; and
“(II) will include the reconstruction of
such station so as to make it a more efficient transportation center
and to better integrate the station with the development above, such
reconstruction plans to be prepared in cooperation with a State transportation
authority.
For purposes of this subparagraph, section 203(b)(2)
shall be applied by substituting ‘January 1, 1998’ for the applicable
date that would otherwise apply.
“(G) A project is described
in this subparagraph if—
“(i) an inducement resolution
was passed on March 9, 1984, for the issuance of obligations with
respect to such project,
“(ii) such resolution
was extended by resolutions passed on August 14, 1984, April 2, 1985,
August 13, 1985, and July 8, 1986,
“(iii) an application
was submitted on January 31, 1984, for an Urban Development Action
Grant with respect to such project, and
“(iv) an Urban Development
Action Grant was preliminarily approved for all or part of such project
on July 3, 1986.
“(H) A project is described
in this subparagraph if it is a redevelopment project, with respect
to which $10,000,000 in industrial revenue bonds were approved by
a State Development Finance Authority on January 15, 1986, a village
transferred approximately $4,000,000 of bond volume authority to the
State in June 1986, and a binding Redevelopment Agreement was executed
between a city and the development team on June 30, 1986.
“(2) Certain Projects
Granted FERC Licenses, Etc.—The amendments made by section 201
(amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467,
514, 751, 1245, 4162, 6111, and 7701 of this title) shall not apply
to any property which is part of a project—
“(A) which is certified
by the Federal Energy Regulatory Commission before March 2, 1986,
as a qualifying facility for purposes of the Public Utility Regulatory
Policies Act of 1978 (see Short Title note set out under 16 U.S.C. 2601),
“(B) which was granted
before March 2, 1986, a hydroelectric license for such project by
the Federal Energy Regulatory Commission, or
“(C) which is a hydroelectric
project of less than 80 megawatts that filed an application for a
permit, exemption, or license with the Federal Energy Regulatory Commission
before March 2, 1986.
“(3) Supply Or Service
Contracts.—The amendments made by section 201 shall not apply
to any property which is readily identifiable with and necessary to
carry out a written supply or service contract, or agreement to lease,
which was binding on March 1, 1986.
“(4) Property Treated
Under Prior Tax Acts.—The amendments made by section 201 shall
not apply—
“(A) to property described
in section 12(c)(2) (as amended by the Technical and Miscellaneous
Revenue Act of 1988), 31(g)(5), or 31(g)(17)(J) of the Tax Reform
Act of 1984 (sections 12(c)(2) and 31(g)(5), (17)(J) of Pub. L. 98-369, set out as notes below),
“(B) to property described
in section 209(d)(1)(B) of the Tax Equity and Fiscal Responsibility
Act of 1982, as amended by the Tax Reform Act of 1984 (section 209(d)(1)(B)
of Pub. L. 97-248, as amended,
set out as a note below), and
“(C) to property described
in section 216(b)(3) of the Tax Equity and Fiscal Responsibility Act
of 1982 (section 216(b)(3) of Pub. L. 97-248,
set out as a note below).
“(5) Special Rules For
Property Included In Master Plans Of Integrated Projects.—The
amendments made by section 201 shall not apply to any property placed
in service pursuant to a master plan which is clearly identifiable
as of March 1, 1986, for any project described in any of the following
subparagraphs of this paragraph:
“(A) A project is described in this subparagraph
if—
“(i) the project involves production platforms
for offshore drilling, oil and gas pipeline to shore, process and
storage facilities, and a marine terminal, and
“(ii) at least $900,000,000
of the costs of such project were incurred before September 26, 1985.
“(B) A project is described in this subparagraph
if—
“(i) such project involves
a fiber optic network of at least 20,000 miles, and
“(ii) before September
26, 1985, construction commenced pursuant to the master plan and at
least $85,000,000 was spent on construction.
“(C) A project is described in this subparagraph
if—
“(i) such project passes
through at least 10 States and involves intercity communication links
(including one or more repeater sites, terminals and junction stations
for microwave transmissions, regenerators or fiber optics and other
related equipment),
“(ii) the lesser of $150,000,000
or 5 percent of the total project cost has been expended, incurred,
or committed before March 2, 1986, by one or more taxpayers each of
which is a member of the same affiliated group (as defined in section
1504(a) (of the Internal Revenue Code of 1986)), and
“(iii) such project consists
of a comprehensive plan for meeting network capacity requirements
as encompassed within either:
“(I) a November 5, 1985, presentation made
to and accepted by the Chairman of the Board and the president of
the taxpayer, or
“(II) the approvals by the Board of Directors
of the parent company of the taxpayer on May 3, 1985, and September
22, 1985, and of the executive committee of said board on December
23, 1985.
“(D) A project is described
in this subparagraph if—
“(i) such project is part
of a flat rolled product modernization plan which was initially presented
to the Board of Directors of the taxpayer on July 8, 1983,
“(ii) such program will
be carried out at 3 locations, and
“(iii) such project will
involve a total estimated minimum capital cost of at least $250,000,000.
“(E) A project is described
in this subparagraph if the project is being carried out by a corporation
engaged in the production of paint, chemicals, fiberglass, and glass,
and if—
“(i) the project includes
a production line which applies a thin coating to glass in the manufacture
of energy efficient residential products, if approved by the management
committee of the corporation on January 29, 1986,
“(ii) the project is a
turbogenerator which was approved by the president of such corporation
and at least $1,000,000 of the cost of which was incurred or committed
before such date,
“(iii) the project is
a waste-to-energy disposal system which was initially approved by
the management committee of the corporation on March 29, 1982, and
at least $5,000,000 of the cost of which was incurred before September
26, 1985,
“(iv) the project, which
involves the expansion of an existing service facility and the addition
of new lab facilities needed to accommodate topcoat and undercoat
production needs of a nearby automotive assembly plant, was approved
by the corporation's management committee on March 5, 1986, or
“(v) the project is part
of a facility to consolidate and modernize the silica production of
such corporation and the project was approved by the president of
such corporation on August 19, 1985.
“(F) A project is described in this subparagraph
if—
“(i) such project involves
a port terminal and oil pipeline extending generally from the area
of Los Angeles, California, to the area of Midland, Texas, and
“(ii) before September
26, 1985, there is a binding contract for dredging and channeling
with respect thereto and a management contract with a construction
manager for such project.
“(G) A project is described
in this subparagraph if—
“(i) the project is a
newspaper printing and distribution plant project with respect to
which a contract for the purchase of 8 printing press units and related
equipment to be installed in a single press line was entered into
on January 8, 1985, and
“(ii) the contract price
for such units and equipment represents at least 50 percent of the
total cost of such project.
“(H) A project is described
in this subparagraph if it is the second phase of a project involving
direct current transmission lines spanning approximately 190 miles
from the United States-Canadian border to Ayer, Massachusetts, alternating
current transmission lines in Massachusetts from Ayers to Millbury
to West Medway, DC-AC converted terminals to Monroe, New Hampshire,
and Ayer, Massachusetts, and other related equipment and facilities.
“(I) A project is described
in this subparagraph if it involves not more than two natural gas-fired
combined cycle electric generating units each having a net electrical
capability of approximately 233 megawatts, and a sales contract for
approximately one-half of the output of the 1st unit was entered into
in December 1985.
“(J) A project is described
in this subparagraph if—
“(i) the project involves
an automobile manufacturing facility (including equipment and incidental
appurtenances) to be located in the United States, and
“(ii) either—
“(I) the project was the subject of a memorandum
of understanding between 2 automobile manufacturers that was signed
before September 25, 1985, the automobile manufacturing facility (including
equipment and incidental appurtenances) will involve a total estimated
cost of approximately $750,000,000, and will have an annual production
capacity of approximately 240,000 vehicles or
“(II) the Board of Directors of an automobile
manufacturer approved a written plan for the conversion of existing
facilities to produce new models of a vehicle not currently produced
in the United States, such facilities will be placed in service by
July 1, 1987, and such Board action occurred in July 1985 with respect
to a $602,000,000 expenditure, a $438,000,000 expenditure, and a $321,000,000
expenditure.
“(K) A project is described
in this subparagraph if—
“(i) the project involves
a joint venture between a utility company and a paper company for
a supercalendered paper mill, and at least $50,000,000 was incurred
or committed with respect to such project before March 1, 1986, or
“(ii) the project involves
a paper mill for the manufacture of newsprint (including a cogeneration
facility) is generally based on a written design and feasibility study
that was completed on December 15, 1981, and will be placed in service
before January 1, 1991, or
“(iii) the project is
undertaken by a Maine corporation and involves the modernization of
pulp and paper mills in Millinocket and/or East Millinocket, Maine,
or
“(iv) the project involves
the installation of a paper machine for production of coated publication
papers, the modernization of a pulp mill, and the installation of
machinery and equipment with respect to related processes, as of December
31, 1985, in excess of $50,000,000 was incurred for the project, as
of July 1986, in excess of $150,000,000 was incurred for the project,
and the project is located in Pine Bluff, Arkansas, or
“(v) the project involves
property of a type described in ADR classes 26.1, 26.2, 25, 00.3 and
00.4 included in a paper plant which will manufacture and distribute
tissue, towel or napkin products; is located in Effingham County,
Georgia; and is generally based upon a written General Description
which was submitted to the Georgia Department of Revenue on or about
June 13, 1985.
“(L) A project is described
in this subparagraph if—
“(i) a letter of intent
with respect to such project was executed on June 4, 1985, and
“(ii) a 5-percent downpayment
was made in connection with such project for 2 10-unit press lines
and related equipment.
“(M) A project is described in this subparagraph
if—
“(i) the project involves
the retrofit of ammonia plants,
“(ii) as of March 1, 1986,
more than $390,000 had been expended for engineering and equipment,
and
“(iii) more than $170,000
was expensed in 1985 as a portion of preliminary engineering expense.
“(N) A project is described
in this subparagraph if the project involves bulkhead intermodal flat
cars which are placed in service before January 1, 1987, and either—
“(i) more than $2,290,000
of expenditures were made before March 1, 1986, with respect to a
project involving up to 300 platforms, or
“(ii) more than $95,000
of expenditures were made before March 1, 1986, with respect to a
project involving up to 850 platforms.
“(O) A project is described in this subparagraph
if—
“(i) the project involves
the production and transportation of oil and gas from a well located
north of the Arctic Circle, and
“(ii) more than $200,000,000
of cost had been incurred or committed before September 26, 1985.
“(P) A project is described
in this subparagraph if—
“(i) a commitment letter
was entered into with a financial institution on January 23, 1986,
for the financing of the project,
“(ii) the project involves
intercity communication links (including microwave and fiber optics
communications systems and related property),
“(iii) the project consists
of communications links between -“ (I) Omaha, Nebraska, and
Council Bluffs, Iowa,
“(II) Waterloo, Iowa and Sioux City, Iowa,
“(III) Davenport, Iowa and Springfield, Illinois,
and
“(iv) the estimated cost
of such project is approximately $13,000,000.
“(Q) A project is described
in this subparagraph if—
“(i) such project is a
mining modernization project involving mining, transport, and milling
operations,
“(ii) before September
26, 1985, at least $20,000,000 was expended for engineering studies
which were approved by the Board of Directors of the taxpayer on January
27, 1983, and
“(iii) such project will
involve a total estimated minimum cost of $350,000,000.
“(R) A project is described in this subparagraph
if—
“(i) such project is a
dragline acquired in connection with a 3-stage program which began
in 1980 to increase production from a coal mine,
“(ii) at least $35,000,000
was spent before September 26, 1985, on the 1st 2 stages of the program,
and
“(iii) at least $4,000,000
was spent to prepare the mine site for the dragline.
“(S) A project is described
in this subparagraph if—it is a project consisting of a mineral
processing facility using a heap leaching system (including waste
dumps, low-grade dumps, a leaching area, and mine roads) and if—
“(i) convertible subordinated
debentures were issued in August 1985, to finance the project,
“(ii) construction of
the project was authorized by the Board of Directors of the taxpayer
on or before December 31, 1985,
“(iii) at least $750,000
was paid or incurred with respect to the project on or before December
31, 1985, and
“(iv) the project is placed
in service on or before December 31, 1986.
“(T) A project is described
in this subparagraph if it is a plant facility on Alaska's North Slope
which is placed in service before January 1, 1988, and—
“(i) the approximate cost
of which is $675,000,000, of which approximately $400,000,000 was
spent on off-site construction,
“(ii) the approximate
cost of which is $445,000,000, of which approximately $400,000,000
was spent on off-site construction and more than 50 percent of the
project cost was spent prior to December 31, 1985, or
“(iii) the approximate
cost of which is $375,000,000, of which approximately $260,000,000
was spent on off-site construction.
“(U) A project is described
in this subparagraph if it involves the connecting of existing retail
stores in the downtown area of a city to a new covered area, the total
project will be 250,000 square feet, a formal Memorandum of Understanding
relating to development of the project was executed with the city
on July 2, 1986, and the estimated cost of the project is $18,186,424.
“(V) A project is described
in this subparagraph if it includes a 200,000 square foot office tower,
a 200-room hotel, a 300,000 square foot retail center, an 800-space
parking facility, the total cost is projected to be $60,000,000, and
$1,250,000 was expended with respect to the site before August 25,
1986.
“(W) A project is described
in this subparagraph if it is a joint use and development project
including an integrated hotel, convention center, office, related
retail facilities and public mass transportation terminal, and vehicle
parking facilities which satisfies the following conditions:
“(i) is developed within
certain air space rights and upon real property exchanged for such
joint use and development project which is owned or acquired by a
state department of transportation, a regional mass transit district
in a county with a population of at least 5,000,000 and a community
redevelopment agency;
“(ii) such project affects
an existing, approximately 40 acre public mass transportation bus-way
terminal facility located adjacent to an interstate highway;
“(iii) a memorandum of
understanding with respect to such joint use and development project
is executed by a state department of transportation, such a county
regional mass transit district and a community redevelopment agency
on or before December 31, 1986, and
“(iv) a major portion
of such joint use and development project is placed in service by
December 31, 1990.
“(X) A project is described in this subparagraph
if—
“(i) it is an $8,000,000
project to provide advanced control technology for adipic acid at
a plant, which was authorized by the company's Board of Directors
in October 1985, at December 31, 1985, $1,400,000 was committed and
$400,000 expended with respect to such project, or
“(ii) it is an $8,300,000
project to achieve compliance with State and Federal regulations for
particulates emissions, which was authorized by the company's Board
of Directors in December 1985, by March 31, 1986, $250,000 was committed
and $250,000 was expended with respect to such project, or
“(iii) it is a $22,000,000
project for the retrofit of a plant that makes a raw material for
aspartame, which was approved in the company's December 1985 capital
budget, if approximately $3,000,000 of the $22,000,000 was spent before
August 1, 1986.
“(Y) A project is described
in this subparagraph if such project passes through at least 9 States
and involves an intercity communication link (including multiple repeater
sites and junction stations for microwave transmissions and amplifiers
for fiber optics); the link from Buffalo to New York/Elizabeth was
completed in 1984; the link from Buffalo to Chicago was completed
in 1985; and the link from New York to Washington is completed in
1986.
“(Z) A project is described
in this subparagraph if—
“(i) such project involves
a fiber optic network of at least 475 miles, passing through Minnesota
and Wisconsin; and
“(ii) before January 1,
1986, at least $15,000,000 was expended or committed for electronic
equipment or fiber optic cable to be used in constructing the network.
“(6) Natural Gas Pipeline.—The
amendments made by section 201 (amending sections 46, 167, 168, 178,
179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701
of this title) shall not apply to any interstate natural gas pipeline
(and related equipment) if—
“(A) 3 applications for
the construction of such pipeline were filed with the Federal Energy
Regulatory Commission before November 22, 1985 (and 2 of which were
filed before September 26, 1985), and
“(B) such pipeline has
1 of its terminal points near Bakersfield, California.
“(7) Certain Leasehold
Improvements.—The amendments made by section 201 shall not apply
to any reasonable leasehold improvements, equipment and furnishings
placed in service by a lessee or its affiliates if—
“(A) the lessee or an
affiliate is the original lessee of each building in which such property
is to be used,
“(B) such lessee is obligated
to lease the building under an agreement to lease entered into before
September 26, 1985, and such property is provided for such building,
and
“(C) such buildings are
to serve as world headquarters of the lessee and its affiliates. For
purposes of this paragraph, a corporation is an affiliate of another
corporation if both corporations are members of a controlled group
of corporations within the meaning of section
1563(a) of the Internal Revenue Codeof 1954 without regard
to section 1563(b)(2) of such Code. Such lessee shall include a securities
firm that meets the requirements of subparagraph (A), except the lessee
is obligated to lease the building under a lease entered into on June
18, 1986.
“(8) Solid Waste Disposal
Facilities.—The amendments made by section 201 (amending sections
46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245,
4162, 6111, and 7701 of this title) shall not apply to the taxpayer
who originally places in service any qualified solid waste disposal
facility (as defined in section
7701(e)(3)(B) of the Internal Revenue Code of 1986) if
before March 2, 1986—
“(A) there is a binding
written contract between a service recipient and a service provider
with respect to the operation of such facility to pay for the services
to be provided by such facility,
“(B) a service recipient
or governmental unit (or any entity related to such recipient or unit)
made a financial commitment of at least $200,000 for the financing
or construction of such facility,
“(C) such facility is
the Tri-Cities Solid Waste Recovery Project involving Fremont, Newark,
and Union City, California, and has received an authority to construct
from the Environmental Protection Agency or from a State or local
agency authorized by the Environmental Protection Agency to issue
air quality permits under the Clean Air Act (42
U.S.C. 7401 et seq.),
“(D) a bond volume carryforward
election was made for the facility and the facility is for Chattanooga,
Knoxville, or Kingsport, Tennessee, or
“(E) such facility is to serve Haverhill,
Massachusetts.
“(9) Certain Submersible
Drilling Units.—In the case of a binding contract entered into
on October 30, 1984, for the purchase of 6 semi-submersible drilling
units at a cost of $425,000,000, such units shall be treated as having
an applicable date under subsection (section) 203(b)(2) of January
1, 1991.
“(10) Wastewater Or Sewage
Treatment Facility.—The amendments made by section 201 (amending
sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751,
1245, 4162, 6111, and 7701 of this title) shall not apply to any property
which is part of a wastewater or sewage treatment facility if—
“(A) site preparation
for such facility commenced before September 1985, and a parish council
approved a service agreement with respect to such facility on December
4, 1985;
“(B) a city-parish advertised
in September 1985, for bids for construction of secondary treatment
improvements for such facility, in May 1985, the city-parish received
statements from 16 firms interested in privatizing the wastewater
treatment facilities, and the metropolitan council selected a privatizer
at its meeting on November 20, 1985, and adopted a resolution authorizing
the Mayor to enter into contractual negotiation with the selected
privatizer;
“(C) the property is part
of a wastewater treatment facility serving Greenville, South Carolina
with respect to which a binding service agreement between a privatizer
and the Western Carolina Regional Sewer Authority with respect to
such facility was signed before January 1, 1986; or
“(D) such property is
part of a wastewater treatment facility (located in Cameron County,
Texas, within one mile of the City of Harlingen), an application for
a wastewater discharge permit was filed with respect to such facility
on December 4, 1985, and a City Commission approved a letter of intent
relating to a service agreement with respect to such facility on August
7, 1986; or a wastewater facility (located in Harlingen, Texas) which
is a subject of such letter of intent and service agreement and the
design of which was contracted for in a letter of intent dated January
23, 1986.
“(11) Certain Aircraft.—The
amendments made by section 201 (amending sections 46, 167, 168, 178,
179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701
of this title) shall not apply to any new aircraft with 19 or fewer
passenger seats if
“(A) the aircraft is manufactured
in the United States. For purposes of this subparagraph, an aircraft
is ‘manufactured' at the point of its final assembly,
“(B) the aircraft was
in inventory or in the planned production schedule of the final assembly
manufacturer, with orders placed for the engine(s) on or before August
16, 1986, and
“(C) the aircraft is purchased
or subject to a binding contract on or before December 31, 1986, and
is delivered and placed in service by the purchaser, before July 1,
1987.
“(12) Certain Satellites.—The
amendments made by section 201 shall not apply to any satellite with
respect to which—
“(A) on or before January
28, 1986, there was a binding contract to construct or acquire a satellite,
and
“(i) an agreement to launch
was in existence on that date, or
“(ii) on or before August
5, 1983, the Federal Communications Commission had authorized the
construction and for which the authorized party has a specific although
undesignated agreement to launch in existence on January 28, 1986;
“(B) by order adopted
on July 25, 1985, the Federal Communications Commission granted the
taxpayer an orbital slot and authorized the taxpayer to launch and
operate 2 satellites with a cost of approximately $300,000,000; or
“(C) the International
Telecommunications Satellite Organization or the International Maritime
Satellite Organization entered into written binding contracts before
May 1, 1985.
“(13) Certain Nonwire
Line Cellular Telephone Systems.—The amendments made by section
201 shall not apply to property that is part of a nonwire line system
in the Domestic Public Cellular Radio Telecommunications Service for
which the Federal Communications Commission has issued a construction
permit before September 26, 1985, but only if such property is placed
in service before January 1, 1987.
“(14) Certain Cogeneration
Facilities.—The amendments made by section 201 shall not apply
to projects consisting of 1 or more facilities for the cogeneration
and distribution of electricity and steam or other forms of thermal
energy if—
“(A) at least $100,000
was paid or incurred with respect to the project before March 1, 1986,
a memorandum of understanding was executed on September 13, 1985,
and the project is placed in service before January 1, 1989,
“(B) at least $500,000
was paid or incurred with respect to the projects before May 6, 1986,
the projects involve a 22-megawatt combined cycle gas turbine plant
and a 45-megawatt coal waste plant, and applications for qualifying
facility status were filed with the Federal Energy Regulatory Commission
on March 5, 1986,
“(C) the project cost
approximates $125,000,000 to $140,000,000 and an application was made
to the Federal Energy Regulatory Commission in July 1985,
“(D) an inducement resolution
for such facility was adopted on September 10, 1985, a development
authority was given an inducement date of September 10, 1985, for
a loan not to exceed $80,000,000 with respect to such facility, and
such facility is expected to have a capacity of approximately 30 megawatts
of electric power and 70,000 pounds of steam per hour,
“(E) at least $1,000,000
was incurred with respect to the project before May 6, 1986, the project
involves a 52-megawatt combined cycle gas turbine plant and a petition
was filed with the Connecticut Department of Public Utility Control
to approve a power sales agreement with respect to the project on
March 27, 1986,
“(F) the project has a
planned scheduled capacity of approximately 38,000 kilowatts, the
project property is placed in service before January 1, 1991, and
the project is operated, established, or constructed pursuant to certain
agreements, the negotiation of which began before 1986, with public
or municipal utilities conducting business in Massachusetts, or
“(G) the Board of Regents
of Oklahoma State University took official action on July 25, 1986,
with respect to the project. In the case of the project described
in subparagraph (F), section 203(b)(2)(A) shall be applied by substituting
‘January 1, 1991’ for ‘January 1, 1989’.
“(15) Certain Electric
Generating Stations.—The amendments made by section 201 shall
not apply to a project located in New Mexico consisting of a coal-fired
electric generating station (including multiple generating units,
coal mine equipment, and transmission facilities) if—
“(A) a tax-exempt entity
will own an equity interest in all property included in the project
(except the coal mine equipment), and
“(B) at least $72,000,000
was expended in the acquisition of coal leases, land and water rights,
engineering studies, and other development costs before May 6, 1986.For
purposes of this paragraph, section 203(b)(2) shall be applied by
substituting ‘January 1, 1996’ for ‘January 1, 1991’ each place it
appears.
“(16) Sports arenas.—
“(A) Indoor Sports Facility.—The
amendments made by section 201 shall not apply to up to $20,000,000
of improvements made by a lessee of any indoor sports facility pursuant
to a lease from a State commission granting the right to make limited
and specified improvements (including planned seat explanations),
if architectural renderings of the project were commissioned and received
before December 22, 1985.
“(B) Metropolitan Sports
Arena.—The amendments made by section 201 shall not apply to
any property which is part of an arena constructed for professional
sports activities in a metropolitan area, provided that such arena
is capable of seating no less than 18,000 spectators and a binding
contract to incur significant expenditures for its construction was
entered into before June 1, 1986.
“(17) Certain Waste-To-Energy
Facilities.—The amendments made by section 201 shall not apply
to 2 agricultural waste-to-energy powerplants (and required transmission
facilities), in connection with which a contract to sell 100 megawatts
of electricity to a city was executed in October 1984.
“(18) Certain Coal-Fired
Plants.—The amendments made by section 201 shall not apply to
one of three 540 megawatt coal-fired plants that are placed in service
after a sale leaseback occurring after January 1, 1986, if—
“(A) the Board of Directors
of an electric power cooperation authorized the investigation of a
sale leaseback of a nuclear generation facility by resolution dated
January 22, 1985, and
“(B) a loan was extended
by the Rural Electrification Administration on February 20, 1986,
which contained a covenant with respect to used property leasing from
unit II.
“(19) Certain Rail Systems.—
“(A) The amendments made
by section 201 shall not apply to a light rail transit system, the
approximate cost of which is $235,000,000, if, with respect to which,
the board of directors of a corporation (formed in September 1984
for the purpose of developing, financing, and operating the system)
authorized a $300,000 expenditure for a feasibility study in April
1985.
“(B) The amendments made
by section 201 shall not apply to any project for rehabilitation of
regional railroad rights of way and properties including grade crossings
which was authorized by the Board of Directors of such company prior
to October 1985; and/or was modified, altered or enlarged as a result
of termination of company contracts, but approved by said Board of
Directors no later than January 30, 1986, and which is in the public
interest, and which is subject to binding contracts or substantive
commitments by December 31, 1987.
“(20) Certain Detergent
Manufacturing Facility.—The amendments made by section 201 shall
not apply to a laundry detergent manufacturing facility, the approximate
cost of which is $13,200,000, with respect to which a project agreement
was fully executed on March 17, 1986.
“(21) Certain Resource
Recovery Facility.—The amendments made by section 201 shall
not apply to any of 3 resource recovery plants, the aggregate cost
of which approximates $300,000,000, if an industrial development authority
adopted a bond resolution with respect to such facilities on December
17, 1984, and the projects were approved by the department of commerce
of a Commonwealth on December 27, 1984.
“(22) The amendments made
by section 201 shall not apply to a computer and office support center
building in Minneapolis, with respect to which the first contract,
with an architecture firm, was signed on April 30, 1985, and a construction
contract was signed on March 12, 1986.
“(23) Certain district
heating and cooling facilities.—The amendments made by section
201 shall not apply to pipes, mains, and related equipment included
in district heating and cooling facilities, with respect to which
the development authority of a State approved the project through
an inducement resolution adopted on October 8, 1985, and in connection
with which approximately $11,000,000 of tax-exempt bonds are to be
issued.
“(24) Certain Vessels.—
“(A) Certain Offshore
Vessels.—The amendments made by section 201 shall not apply
to any offshore vessel the construction contract for which was signed
on February 28, 1986, and the approximate cost of which is $9,000,000.
“(B) Certain Inland River
Vessel.—The amendments made by section 201 shall not apply to
a project involving the reconstruction of an inland river vessel docked
on the Mississippi River at St. Louis, Missouri, on July 14, 1986,
and with respect to which:
“(i) the estimated cost
of reconstruction is approximately $39,000,000;
“(ii) reconstruction was
commenced prior to December 1, 1985;
“(iii) at least $17,000,000
was expended before December 31, 1985; and
“(C) Special Automobile
Carrier Vessels.—The amendments made by section 201 shall not
apply to two new automobile carrier vessels which will cost approximately
$47,000,000 and will be constructed by a United States-flag carrier
to operate, under the United States-flag and with an American crew,
to transport foreign automobiles to the United States, in a case where
negotiations for such transportation arrangements commenced in April
1985, formal contract bids were submitted prior to the end of 1985,
and definitive transportation contracts were awarded in May 1986.
“(D) The amendments made
by section 201 shall not apply to a 562-foot passenger cruise ship,
which was purchased in 1980 for the purpose of returning the vessel
to United States service, the approximate cost of refurbishment of
which is approximately $47,000,000.
“(E) The amendments made
by section 201 shall not apply to the Muskegon, Michigan, Cross-Lake
Ferry project having a projected cost of approximately $7,200,000.
“(F) The amendments made
by section 201 shall not apply to a new automobile carrier vessel,
the contract price for which is no greater than $28,000,000, and which
will be constructed for and placed in service by OSG Car Carriers,
Inc., to transport, under the United States flag and with an American
crew, foreign automobiles to North America in a case where negotiations
for such transportation arrangements commenced in 1985, and definitive
transportation contracts were awarded before June 1986.
“(25) Certain Wood Energy
Projects.—The amendments made by section 201 shall not apply
to two wood energy projects for which applications with the Federal
Energy Regulatory Commission were filed before January 1, 1986, which
are described as follows:
“(A) a 26.5 megawatt plant
in Fresno, California, and
“(B) a 26.5 megawatt plant in Rocklin, California.
“(26) The amendments made
by section 201 shall not apply to property which is a geothermal project
of less than 20 megawatts that was certified by the Federal Energy
Regulatory Commission on July 14, 1986, as a qualifying small power
production facility for purposes of the Public Utility Regulatory
Policies Act of 1978 (see Short Title note set out under 16 U.S.C. 2601) pursuant to an application
filed with the Federal Energy Regulatory Commission on April 17, 1986.
“(27) Certain Economic
Development Projects.—The amendments made by section 201 shall
not apply to any of the following projects:
“(A) A mixed use development
on the East River the total cost of which is approximately $400,000,000,
with respect to which a letter of intent was executed on January 24,
1984, and with respect to which approximately $2.5 million had been
spent by March 1, 1986.
“(B) A 356-room hotel,
banquet, and conference facility (including 540,000 square feet of
office space) the approximate cost of which is $158,000,000, with
respect to which a letter of intent was executed on June 1, 1984,
and with respect to which an inducement resolution and bond resolution
was adopted on August 20, 1985.
“(C) Phase 1 of a 4-phase
project involving the construction of laboratory space and ground-floor
retail space the estimated cost of which is $22,000,000 and with respect
to which a memoradum (sic) of understanding was made on August 29,
1983.
“(D) A project involving
the development of a 490,000 square foot mixed-use building at 152
W. 57th Street, New York, New York, the estimated cost of which is
$100,000,000, and with respect to which a building permit application
was filed in May 1986.
“(E) A mixed-use project
containing a 300 unit, 12-story hotel, garage, two multi-rise office
buildings, and also included a park, renovated riverboat, and barge
with festival marketplace, the capital outlays for which approximate
$68,000,000.
“(F) The construction
of a three-story office building that will serve as the home office
for an insurance group and its affiliated companies, with respect
to which a city agreed to transfer its ownership of the land for the
project in a Redevelopment Agreement executed on September 18, 1985,
once certain conditions are met.
“(G) A commercial bank
formed under the laws of the State of New York which entered into
an agreement on September 5, 1985, to construct its headquarters at
60 Wall Street, New York, New York, with respect to such headquarters.
“(H) Any property which
is part of a commercial and residential project, the first phase of
which is currently under construction, to be developed on land which
is the subject of an ordinance passed on July 20, 1981, by the city
council of the city in which such land is located, designating such
land and the improvements to be placed thereon as a residential-business
planned development, which development is being financed in part by
the proceeds of industrial development bonds in the amount of $62,600,000
issued on December 4, 1985.
“(I) A 600,000 square
foot mixed use building known as Flushing Center with respect to which
a letter of intent was executed on March 26, 1986.In the case of the
building described in subparagraph (I), section 203(b)(2)(A) shall
be applied by substituting ‘January 1, 1993’ for the applicable date
which would otherwise apply.
“(28) The amendments made
by section 201 shall not apply to an $80,000,000 capital project steel
seamless tubular casings minimill and melting facility located in
Youngstown, Ohio, which was purchased by the taxpayer in April 1985,
and—
“(A) the purchase and
renovation of which was approved by a committee of the Board of Directors
on February 22, 1985, and
“(B) as of December 31,
1985, more than $20,000,000 was incurred or committed with respect
to the renovation.
“(29) The amendments made
by section 201 shall not apply to any project for residential rental
property if—
“(A) an inducement resolution
with respect to such project was adopted by the State housing development
authority on January 25, 1985, and
“(B) such project was
the subject of a law suit filed on October 25, 1985.
“(30) The amendments made
by section 201 shall not apply to a 30 megawatt electric generating
facility fueled by geothermal and wood waste, the approximate cost
of which is $55,000,000, and with respect to which a 30-year power
sales contract was executed on March 22, 1985.
“(31) The amendments made
by section 201 shall not apply to railroad maintenance-of-way equipment,
with respect to which a Boston bank entered into a firm binding contract
with a major northeastern railroad before March 2, 1986, to finance
$10,500,000 of such equipment, if all of the equipment was placed
in service before August 1, 1986.
“(32) The amendment made
by section 201 shall not apply to—
“(A) a facility constructed
on approximately seven acres of land located on Ogle's Poso Creek
Oil field, the primary fuel of which will be bituminous coal from
Utah or Wyoming, with respect to which an application for an authority
to construct was filed on December 26, 1985, an authority to construct
was issued on July 2, 1986, and a prevention of significant deterioration
permit application was submitted in May 1985,
“(B) a facility constructed
on approximately seven acres of land located on Teorco's Jasmin oil
field, the primary fuel of which will be bituminous coal from Utah
or Wyoming, with respect to which an authority to construct was filed
on December 26, 1985, an authority to construct was issued on July
2, 1986, and a prevention of significant deterioration permit application
was submitted in July 1985,
“(C) the Mountain View
Apartments, in Hadley, Massachusetts,
“(D) a facility expected
to have a capacity of not less than 65 megawatts of electricity, the
steam from which is to be sold to a pulp and paper mill, with respect
to which application was made to the Federal Regulatory Commission
for certification as a qualified facility on November 1, 1985, and
received such certification on January 24, 1986,
“(E) $5,000,000 of equipment
ordered in 1986, in connection with a 60,000 square foot plant in
Masontown, Pennsylvania, that was completed in 1983,
“(F) a magnetic resonance
imaging machine, with respect to which a binding contract to purchase
was entered into in April 1986, in connection with the construction
of a magnetic resonance imaging clinic with respect to which a Determination
of Need certification was obtained from a State Department of Public
Health on October 22, 1985, if such property is placed in service
before December 31, 1986,
“(G) a company located
in Salina, Kansas, which has been engaged in the construction of highways
and city streets since 1946, but only to the extent of $1,410,000
of investment in new section 38 property,
“(H) a $300,000 project
undertaken by a small metal finishing company located in Minneapolis,
Minnesota, the first parts of which were received and paid for in
January 1986, with respect to which the company received Board approval
to purchase the largest piece of machinery it has ever ordered in
1985,
“(I) A $1,200,000 finishing
machine that was purchased on April 2, 1986 and placed into service
in September 1986 by a company located in Davenport, Iowa,
“(J) A 25 megawatt small
power production facility, with respect to which Qualifying Facility
status numbered QF86-593-000 was granted on March 5, 1986,
“(K) A 250 megawatt coal-fired
electric plant in northeastern Nevada estimated to cost $600,000,000
and known as the Thousand Springs project, on which the Sierra Pacific
Power Company, a subsidiary of Sierra Pacific Resources, began in
1980 work to design, finance, construct, and operate (and section
203(b)(2) shall be applied with respect to such plant by substituting
‘January 1, 1995’ for ‘January 1, 1991’),
“(L) 128 units of rental
housing in connection with the Point Gloria Limited Partnership,
“(M) property which is
part of the Kenosha Downtown Redevelopment Project and which is financed
with the proceeds of bonds issued pursuant to section 1317(6)(W) (set
out as a note under section 141 of this title),
“(N) Lakeland Park Phase II, in Baton Rouge,
Louisiana,
“(O) the Santa Rosa Hotel,
in Pensacola, Florida,
“(P) the Sheraton Baton
Rouge, in Baton Rouge, Louisiana,
“(Q) $300,000 of equipment
placed in service in 1986, in connection with the renovation of the
Best Western Townhouse Convention Center in Cedar Rapids, Iowa,
“(R) the segment of a
nationwide fiber optics telecommunications network placed in service
by SouthernNet, the total estimated cost of which is $37,000,000,
“(S) two cogeneration
facilities, to be placed in service by the Reading Anthracite Coal
Company (or any subsidiary thereof), costing approximately $110,000,000
each, with respect to which filings were made with the Federal Energy
Regulatory Commission by December 31, 1985, and which are located
in Pennsylvania,
“(T) a portion of a fiber
optics network placed in service by LDX NET after December 31, 1988,
but only to the extent the cost of such portion does not exceed $25,000,000,
“(U) 3 newly constructed
fishing vessels, and one vessel that is overhauled, constructed by
Mid Coast Marine, but only to the extent of $6,700,000 of investment,
“(V) $350,000 of equipment
acquired in connection with the reopening of a plant in Bristol, Rhode
Island, which plant was purchased by Buttonwoods, Ltd., Associates
on February 7, 1986,
“(W) $4,046,000 of equipment
placed in service by Brendle's Incorporated, acquired in connection
with a Distribution Center,
“(X) a multi-family mixed-use
housing project located in a home rule city, the zoning for which
was changed to residential business planned development on November
26, 1985, and with respect to which both the home rule city on December
4, 1985, and the State housing finance agency on December 20, 1985,
adopted inducement resolutions,
“(Y) the Myrtle Beach
Convention Center, in South Carolina, to the extent of $25,000,000
of investment, and
“(Z) railroad cars placed
in service by the Pullman Leasing Company, pursuant to an April 3,
1986 purchase order, costing approximately $10,000,000.
“(33) The amendments made
by section 201 (amending sections 46, 167, 168, 178, 179, 280F, 291,
312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title)
shall not apply to—
“(A) $400,000 of equipment
placed in service by Super Key Market, if such equipment is placed
in service before January 1, 1987,
“(B) the Trolley Square
project, the total project cost of which is $24,500,000, and the amount
of depreciable real property of which is $14,700,000.
“(C)(i) a waste-to-energy
project in Derry, New Hampshire, costing approximately $60,000,000,
and
“(ii) a waste-to-energy
project in Manchester, New Hampshire, costing approximately $60,000,000,
“(D) the City of Los Angeles
Co-composting project, the estimated cost of which is $62,000,000,
with respect to which, on July 17, 1985, the California Pollution
Control Financing Authority issued an initial resolution in the maximum
amount of $75,000,000 to finance this project,
“(E) the St. Charles, Missouri Mixed-Use
Center,
“(F) Oxford Place in Tulsa,
Oklahoma,
“(G) an amount of investment
generating $20,000,000 of investment tax credits attributable to property
used on the Illinois Diversatech Campus,
“(H) $25,000,000 of equipment
used in the Melrose Park Engine Plant that is sold and leased back
by Navistar,
“(I) 80,000 vending machines,
for a cost approximating $3,400,000 placed into service by Folz Vending
Co.,
“(J) A 25.85 megawatt
alternative energy facility located in Deblois, Maine, with respect
to which certification by the Federal Energy Regulatory Commission
was made on April 3, 1986,
“(K) Burbank Manors, in
Illinois, and
“(L) a cogeneration facility
to be built at a paper company in Turners Falls, Massachusetts, with
respect to which a letter of intent was executed on behalf of the
paper company on September 26, 1985.
“(34) The amendments made
by section 201 shall not apply to an approximately 240,000 square
foot beverage container manufacturing plant located in Batesville,
Mississippi, or plant equipment used exclusively on the plant premises
if—
“(A) a 2-year supply contract
was signed by the taxpayer and a customer on November 1, 1985,
“(B) such contract further
obligated the customer to purchase beverage containers for an additional
5-year period if physical signs of construction of the plant are present
before September 1986,
“(C) ground clearing for
such plant began before August 1986, and
“(D) construction is completed,
the equipment is installed, and operations are commenced before July
1, 1987.
“(35) The amendments made
by section 201 shall not apply to any property which is part of the
multifamily housing at the Columbia Point Project in Boston, Massachusetts.
A project shall be treated as not described in the preceding sentence
and as not described in section 252(f)(1)(D) (set out as a note under
section 42 of this title) unless such project includes at substantially
all times throughout the compliance period (within the meaning of section 42(i)(1) of the Internal Revenue Code of
1986), a facility which provides health services to the residents
of such project for fees commensurate with the ability of such individuals
to pay for such services.
“(36) The amendments made
by section 201 shall not apply to any ethanol facility located in
Blair, Nebraska, if—
“(A) in July of 1984 an
initial binding construction contract was entered into for such facility,
“(B) in June of 1986,
certain Department of Energy recommended contract changes required
a change of contractor, and
“(C) in September of 1986,
a new contract to construct such facility, consistent with such recommended
changes, was entered into.
“(37) The amendments made
by section 201 shall not apply to any property which is part of a
sewage treatment facility if, prior to January 1, 1986, the City of
Conyers, Georgia, selected a privatizer to construct such facility,
received a guaranteed maximum price bid for the construction of such
facility, signed a letter of intent and began substantial negotiations
of a service agreement with respect to such facility.
“(38) The amendments made
by section 201 shall not apply to—
“(A) a $28,000,000 wood
resource complex for which construction was authorized by the Board
of Directors on August 9, 1985,
“(B) an electrical cogeneration
plant in Bethel, Maine which is to generate 2 megawatts of electricity
from the burning of wood residues, with respect to which a contract
was entered into on July 10, 1984, and with respect to which $200,000
of the expected $2,000,000 cost had been committed before June 15,
1986,
“(C) a mixed income housing
project in Portland, Maine which is known as the Back Bay Tower and
which is expected to cost $17,300,000,
“(D) the Eastman Place
project and office building in Rochester, New York, which is projected
to cost $20,000,000, with respect to which an inducement resolution
was adopted in December 1986, and for which a binding contract of
$500,000 was entered into on April 30, 1986,
“(E) the Marquis Two project
in Atlanta, Georgia which has a total budget of $72,000,000 and the
construction phase of which began under a contract entered into on
March 26, 1986,
“(F) a 166-unit continuing
care retirement center in New Orleans, Louisiana, the construction
contract for which was signed on February 12, 1986, and is for a maximum
amount not to exceed $8,500,000,
“(G) the expansion of
the capacity of an oil refining facility in Rosemont, Minnesota from
137,000 to 207,000 barrels per day which is expected to be completed
by December 31, 1990, and
“(H) a project in Ransom,
Pennsylvania which will burn coal waste (known as ‘culm’) with an
approximate cost of $64,000,000 and for which a certification from
the Federal Energy Regulatory Commission was received on March 11,
1986.
“(39) The amendments made
by section 201 shall not apply to any facility for the manufacture
of an improved particle board if a binding contract to purchase such
equipment was executed March 3, 1986, such equipment will be placed
in service by January 1, 1988, and such facility is located in or
near Moncure, North Carolina.
“(40) Certain Trucks,
Etc.—The amendments made by section 201 shall not apply to trucks,
tractor units, and trailers which a privately held truck leasing company
headquartered in Des Moines, Iowa, contracted to purchase in September
1985 but only to the extent the aggregate reduction in Federal tax
liability by reason of the application of this paragraph does not
exceed $8,500,000.
“(b) Special Rule for Certain Property.—The
provisions of section 168(f)(8) of
the Internal Revenue Code of 1954 (as amended by section
209 of the Tax Equity and Fiscal Responsibility Act of 1982) shall
continue to apply to any transaction permitted by reason of section
12(c)(2) of the Tax Reform Act of 1984 or section 209(d)(1)(B) of
the Tax Equity and Fiscal Responsibility Act of 1982 (as amended by
the Tax Reform Act of 1984) (section 12(c)(2) of Pub. L. 98-369 and section 209(d)(1)(B)
of Pub. L. 97-248, respectively,
set out as notes below).
“(c) Applicable Date in Certain Cases.—
“(1) Section 203(b)(2)
shall be applied by substituting ‘January 1, 1992’ for ‘January 1,
1991’ in the following cases.
“(A) in the case of a
2-unit nuclear powered electric generating plant (and equipment and
incidental appurtenances), located in Pennsylvania and constructed
pursuant to contracts entered into by the owner operator of the facility
before December 31, 1975, including contracts with the engineer/constructor
and the nuclear steam system supplier, such contracts shall be treated
as contracts described in section 203(b)(1)(A),
“(B) a cogeneration facility
with respect to which an application with the Federal Energy Regulatory
Commission was filed on August 2, 1985, and approved October 15, 1985.
“(C) in the case of a
1,300 megawatt coal-fired steam powered electric generating plant
(and related equipment and incidental appurtenances), which the three
owners determined in 1984 to convert from nuclear power to coal power
and for which more than $600,000,000 had been incurred or committed
for construction before September 25, 1985, except that no investment
tax credit will be allowable under section 49(d)(3) added by section
211(a) of this Act (section 49(d) of this title does not contain a
par. (3)) for any qualified progress expenditures made after December
31, 1990.
“(2) Section 203(b)(2)
shall be applied by substituting ‘April 1, 1992’ for the applicable
date that would otherwise apply, in the case of the second unit of
a twin steam electric generating facility and related equipment which
was granted a certificate of public convenience and necessity by a
public service commission prior to January 1, 1982, if the first unit
of the facility was placed in service prior to January 1, 1985, and
before September 26, 1985, more than $100,000,000 had been expended
toward the construction of the second unit.
“(3) Section 203(b)(2)
shall be applied by substituting ‘January 1, 1990,’ (or, in the case
of a project described in subparagraph (B), by substituting ‘April
1, 1992’) for the applicable date that would otherwise apply in the
case of—
“(A) new commercial passenger
aircraft used by a domestic airline, if a binding contract with respect
to such aircraft was entered into on or before April 1, 1986, and
such aircraft has a present class life of 12 years,
“(B) a pumped storage
hydroelectric project with respect to which an application was made
to the Federal Energy Regulatory Commission for a license on February
4, 1974, and license was issued August 1, 1977, the project number
of which is 2740, and
“(C) a newsprint mill
in Pend Oreille county, Washington, costing about $290,000,000. In
the case of an aircraft described in subparagraph (A), section 203(b)(1)(A)
shall be applied by substituting ‘April 1, 1986’ for ‘March 1, 1986’
and section 49(e)(1)(B) of the
Internal Revenue Code of 1986 shall not apply.
“(4) The amendments made
by section 201 (amending sections 46, 167, 168, 178, 179, 280F, 291,
312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title)
shall not apply to a limited amount of the following property or a
limited amount of property set forth in a submission before September
16, 1986, by the following taxpayers:
“(A) Arena project, Michigan,
but only with respect to $78,000,000 of investments.
“(B) Campbell Soup Company,
Pennsylvania, California, North Carolina, Ohio, Maryland, Florida,
Nebraska, Michigan, South Carolina, Texas, New Jersey, and Delaware,
but only with respect to $9,329,000 of regular investment tax credits.
“(C) The Southeast Overtown/Park
West development, Florida, but only with respect to $200,000,000 of
investments.
“(D) Equipment placed
in service and operated by Leggett and Platt before July 1, 1987,
but only with respect to $2,000,000 of regular investment tax credits,
and subsections (c) and (d) of section 49
of the Internal Revenue Code of 1986 shall not apply to
such equipment.
“(E) East Bank Housing Project.
“(F) $1,561,215 of investments by Standard
Telephone Company.
“(G) Five aircraft placed
in service before January 1, 1987, by Presidential Air.
“(H) A rehabilitation
project by Ann Arbor Railroad, but only with respect to $2,900,000
of investments.
“(I) Property that is
part of a cogeneration project located in Ada, Michigan, but only
with respect to $30,000,000 of investments.
“(J) Anchor Store Project,
Michigan, but only with respect to $21,000,000 of investments.
“(K) A waste-fired electrical
generating facility of Biogen Power, but only with respect to $34,000,000
of investments.
“(L) $14,000,000 of television
transmitting towers placed in service by Media General, Inc., which
were subject to binding contracts as of January 21, 1986, and will
be placed in service before January 1, 1988,
“(M) Interests of Samuel
A. Hardage (whether owned individually or in partnership form).
“(N) Two aircraft of Mesa
Airlines with an aggregate cost of $5,723,484.
“(O) Yarn-spinning equipment
used at Spray Cotton Mills, but only with respect to $3,000,000 of
investments.
“(P) 328 units of low-income
housing at Angelus Plaza, but only with respect to $20,500,000 of
investments.
“(Q) One aircraft of Continental
Aviation Services with a cost of approximately $15,000,000 that was
purchased pursuant to a contract entered into during March of 1983
and that is placed in service by December 31, 1988.
“(d) Railroad Grading and Tunnel Bores.—
“(1) In General.—In
the case of expenditures for railroad grading and tunnel bores which
were incurred by a common carrier by railroad to replace property
destroyed in a disaster occurring on or about April 17, 1983, near
Thistle, Utah, such expenditures, to the extent not in excess of $15,000,000,
shall be treated as recovery property which is 5-year property under section 168 of the Internal Revenue Code of
1954 (as in effect before the amendments made by this Act) and which
is placed in service at the time such expenditures were incurred.
“(2) Business Interruption
Proceeds.—Business interruption proceeds received for loss of
use, revenues, or profits in connection with the disaster described
in paragraph (1) and devoted by the taxpayer described in paragraph
(1) to the construction of replacement track and related grading and
tunnel bore expenditures shall be treated as constituting an amount
received from the involuntary conversion of property under section
1033(a)(2) of such Code.
“(3) Effective Date.—This
subsection shall apply to taxable years ending after April 17, 1983.
“(e) Treatment of Certain Disaster Losses.—
“(1) In General.—In
the case of a disaster described in paragraph (2), at the election
of the taxpayer, the amendments made by section 201 of this Act (amending
sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751,
1245, 4162, 6111, and 7701 of this title)—
“(A) shall not apply to
any property placed in service during 1987 or 1988, or
“(B) shall apply to any
property placed in service during 1985 or 1986, which is property
to replace property lost, damaged, or destroyed in such disaster.
“(2) Disaster to which
section applies.—This section shall apply to a flood which occurred
on November 3 through 7, 1985, and which was declared a natural disaster
area by the President of the United States.”
Section 1002(c)(3) of Pub.
L. 100-647 provided that: “Notwithstanding section
203 of the Reform Act (section 203 of Pub.
L. 99-514, set out above), the amendments made by section
201 of the Reform Act (section 201 of Pub.
L. 99-514, amending sections 46, 167, 168, 178, 179, 280F,
291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title)
shall apply to any real property which was acquired before January
1, 1987, and was converted on or after such date from personal use
to a use for which depreciation is allowable.”
Amendment by section 201(a) of Pub. L. 99-514 not applicable to any property
placed in service before Jan. 1, 1994, if such property placed in
service as part of specified rehabilitations, and not applicable to
certain additional rehabilitations, see section 251(d)(2), (3) of Pub. L. 99-514, set out as a note under
section 46 of this title.
Amendment by sections 1802(a)(1)–(2)(D),
(G), (3), (4)(A), (B), (7), (b)(1), 1809(a)(1)–(2)(B), (4)(A),(B)
of Pub. L. 99-514 effective, except
as otherwise provided, as if included in the provisions of the Tax
Reform Act of 1984, Pub. L. 98-369,
div. A, to which such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note under
section 48 of this title.
Section 1802(a)(2)(E)(ii) of Pub.
L. 99-514 provided that:
“(I) Except as otherwise provided in this
clause, the amendment made by clause (i) (amending this section) shall
apply to property placed in service after September 27, 1985; except
that such amendment shall not apply to any property acquired pursuant
to a binding written contract in effect on such date (and at all times
thereafter).
“(II) If an election under this subclause
is made with respect to any property, the amendment made by clause
(i) shall apply to such property whether or not placed in service
on or before September 27, 1985.”
Section 1809(a)(2)(C)(i) of Pub.
L. 99-514 provided in part that amendment by section 1809(a)(2)(C)(i)
of Pub. L. 99-514 is effective
on and after Oct. 22, 1986.
Section 1809(b)(3) of Pub.
L. 99-514 provided that: “The amendments made by this
subsection (amending this section) shall apply to property placed
in service by the transferee after December 31, 1985, in taxable years
ending after such date.”
EFFECTIVE DATE OF 1985 AMENDMENT
Section 105(b) of Pub.
L. 99-121, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(1) In General.—Except as otherwise
provided in this subsection, the amendments made by section 103 (amending
sections 47, 48, 57, 168, 312, and 1245 of this title) shall apply
with respect to property placed in service by the taxpayer after May
8, 1985.
“(2) Exception.—The amendments made
by section 103 shall not apply to property placed in service by the
taxpayer before January 1, 1987, if—
“(A) the taxpayer or a
qualified person entered into a binding contract to purchase or construct
such property before May 9, 1985, or
“(B) construction of such
property was commenced by or for the taxpayer or a qualified person
before May 9, 1985.
For purposes of this paragraph, the term ‘qualified
person’ means any person whose rights in such a contract or such property
are transferred to the taxpayer, but only if such property is not
placed in service before such rights are transferred to the taxpayer.
“(3) Special Rule For Components.—For
purposes of applying section 168(f)(1)(B)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as amended by section 103)
to components placed in service after December 31, 1986, property
to which paragraph (2) of this subsection applies shall be treated
as placed in service by the taxpayer before May 9, 1985.
“(4) Technical Correction.—The amendment
made by paragraph (6) of section 103(b) (amending section 47 of this
title) shall apply as if included in the amendments made by section
111 of the Tax Reform Act of 1984 (Pub. L.
98-369, see Effective Date of 1984 Amendment note below).
“(5) Special Rule For Leasing Of Qualified
Rehabilitated Buildings.—The amendment made by paragraph (5)
of section 103(b) to section
48(g)(2)(B)(v) of the Internal Revenue Code of 1986 shall
not apply to leases entered into before May 22, 1985, but only if
the lessee signed the lease before May 17, 1985.”
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 12 of Pub.
L. 98-369 applicable to taxable years ending after Dec.
31, 1983, see section 18(a) of Pub. L. 98-369,
set out as a note under section 48 of this title.
Section 31(g) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, title XVIII, Sec. 1802(a)(2)(F), (10)(A)–(D)(i),
(E)–(G), Oct. 22, 1986, 100 Stat.
2095, 2788, 2790, 2791; Pub. L.
100-647, title I, Sec. 1018(b)(1), Nov. 10, 1988, 102 Stat. 3577, provided that:
“(1) In General.—Except as otherwise
provided in this subsection, the amendments made by this section (amending
sections 46, 48, 168, and 7701 of this title) shall apply—
“(A) to property placed
in service by the taxpayer after May 23, 1983, in taxable years ending
after such date, and
“(B) to property placed
in service by the taxpayer on or before May 23, 1983, if the lease
to the tax-exempt entity is entered into after May 23, 1983.
“(2) Leases Entered Into On Or Before May
23, 1983.—The amendments made by this section shall not apply
with respect to any property leased to a tax-exempt entity if the
property is leased pursuant to—
“(A) a lease entered into
on or before May 23, 1983 (or a sublease under such a lease), or
“(B) any renewal or extension
of a lease entered into on or before May 23, 1983, if such renewal
or extension is pursuant to an option exercisable by the tax-exempt
entity which was held by the tax-exempt entity on May 23, 1983.
“(3) Binding Contracts, Etc.—
“(A) The amendments made
by this section shall not apply with respect to any property leased
to a tax-exempt entity if such lease is pursuant to 1 or more written
binding contracts which, on May 23, 1983, and at all times thereafter,
required—
“(i) the taxpayer (or
his predecessor in interest under the contract) to acquire, construct,
reconstruct, or rehabilitate such property, and
“(ii) the tax-exempt entity
(or a tax-exempt predecessor thereof) to be the lessee of such property.
“(B) Paragraph (9) of section 168(j) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
(as added by this section) shall not apply with respect to any property
owned by a partnership if—
“(i) such property was
acquired by such partnership on or before October 21, 1983, or
“(ii) such partnership
entered into a written binding contract which, on October 21, 1983,
and at all times thereafter, required the partnership to acquire or
construct such property.
“(C) The amendments made
by this section shall not apply with respect to any property leased
to a tax-exempt entity (other than any foreign person or entity)—
“(i) if—
“(I) on or before May
23, 1983, the taxpayer (or his predecessor in interest under the contract)
or the tax-exempt entity entered into a written binding contract to
acquire, construct, reconstruct, or rehabilitate such property and
such property had not previously been used by the tax-exempt entity,
or
“(II) the taxpayer or
the tax-exempt entity acquired the property after June 30, 1982, and
on or before May 23, 1983, or completed the construction, reconstruction,
or rehabilitation of the property after December 31, 1982, and on
or before May 23, 1983, and
“(ii) if such lease is
pursuant to a written binding contract entered into before January
1, 1985, which requires the tax-exempt entity to be the lessee of
such property.
“(4) Official Governmental Action On Or Before
November 1, 1983.—
“(A) In General.—The
amendments made by this section shall not apply with respect to any
property leased to a tax-exempt entity (other than the United States,
any agency or instrumentality thereof, or any foreign person or entity)
if—
“(i) on or before November
1, 1983, there was significant official governmental action with respect
to the project or its design, and
“(ii) the lease to the
tax-exempt entity is pursuant to a written binding contract entered
into before January 1, 1985, which requires the tax-exempt entity
to be the lessee of the property.
“(B) Significant Official
Governmental Action.—For purposes of subparagraph (A), the term
‘significant official governmental action’ does not include granting
of permits, zoning changes, environmental impact statements, or similar
governmental actions.
“(C) Special Rule For
Credit Unions.—In the case of any property leased to a credit
union pursuant to a written binding contract with an expiration date
of December 31, 1984, which was entered into by such organization
on August 23, 1984—
“(i) such credit union
shall not be treated as an agency or instrumentality of the United
States; and
“(ii) clause (ii) of subparagraph
(A) shall be applied by substituting ‘January 1, 1987’ for ‘January
1, 1985’.
“(D) Special Rule For
Greenville Auditorium Board.—For purposes of this paragraph,
significant official governmental action taken by the Greenville County
Auditorium Board of Greenville, South Carolina, before May 23, 1983,
shall be treated as significant official governmental action with
respect to the coliseum facility subject to a binding contract to
lease which was in effect on January 1, 1985.
“(E) Treatment Of Certain
Historic Structures.—If—
“(i) on June 16, 1982,
the legislative body of the local governmental unit adopted a bond
ordinance to provide funds to renovate elevators in a deteriorating
building owned by the local governmental unit and listed in the National
Register, and
“(ii) the chief executive
officer of the local governmental unit, in connection with the renovation
of such building, made an application on June 1, 1983, to a State
agency for a Federal historic preservation grant and made an application
on June 17, 1983, to the Economic Development Administration of the
United States Department of Commerce for a grant, the requirements
of clauses (i) and (ii) of subparagraph (A) shall be treated as met.
“(5) Mass Commuting Vehicles.—The amendments
made by this section shall not apply to any qualified mass commuting
vehicle (as defined in section 103(b)(9)
of the Internal Revenue Codeof 1986 (formerly I.R.C. 1954)) which is financed in whole
or in part by obligations the interest on which is excludable from
gross income under section 103(a) of such Code if—
“(A) such vehicle is placed in service before
January 1, 1988, or
“(B) such vehicle is placed
in service on or after such date—
“(i) pursuant to a binding
contract or commitment entered into before April 1, 1983, and
“(ii) solely because of
conditions which, as determined by the Secretary of the Treasury or
his delegate, are not within the control of the lessor or lessee.
“(6) Certain Turbines And Boilers.—The
amendments made by this section shall not apply to any property described
in section 208(d)(3)(E) of the Tax Equity and Fiscal Responsibility
Act of 1982 (section 208(d)(3)(E) of Pub.
L. 97-248, set out as an Effective Date of 1982 Amendments
note below).
“(7) Certain Facilities For Which Ruling
Requests Filed On Or Before May 23, 1983.—The amendments made
by this section shall not apply with respect to any facilities described
in clause (ii) of section 168(f)(12)(C)
of the Internal Revenue Code of 1986 (relating to certain
sewage or solid waste disposal facilities), as in effect on the day
before the date of the enactment of this Act (July 18, 1984), if a
ruling request with respect to the lease of such facility to the tax-exempt
entity was filed with the Internal Revenue Service on or before May
23, 1983.
“(8) Recovery Period For Certain Qualified
Sewage Facilities.—
“(A) In General.—In
the case of any property (other than 15-year real property) which
is part of a qualified sewage facility, the recovery period used for
purposes of paragraph (1) of section
168(j) of the Internal Revenue Code of 1986 (as added by
this section) shall be 12 years. For purposes of the preceding sentence,
the term ‘15-year real property’ includes 18-year real property.
“(B) Qualified Sewage
Facility.—For purposes of subparagraph (A), the term ‘qualified
sewage facility’ means any facility which is part of the sewer system
of a city, if—
“(i) on June 15, 1983,
the City Council approved a resolution under which the city authorized
the procurement of equity investments for such facility, and
“(ii) on July 12, 1983,
the Industrial Development Board of the city approved a resolution
to issue a $100,000,000 industrial development bond issue to provide
funds to purchase such facility.
“(9) Property Used By The Postal Service.—In
the case of property used by the United States Postal Service, paragraphs
(1) and (2) shall be applied by substituting ‘October 31’ for ‘May
23’.
“(10) Existing Appropriations.—The
amendments made by this section shall not apply to personal property
leased to or used by the United States if—
“(A) an express appropriation
has been made for rentals under such lease for the fiscal year 1983
before May 23, 1983, and
“(B) the United States
or an agency or instrumentality thereof has not provided an indemnification
against the loss of all or a portion of the tax benefits claimed under
the lease or service contract.
“(11) Special Rule For Certain Partnerships.—
“(A) Partnerships For
Which Qualifying Action Existed Before October 21, 1983.—Paragraph
(9) of section 168(j) of the Internal
Revenue Code of 1986 (as added by this section) shall not
apply to any property acquired, directly or indirectly, before January
1, 1985, by any partnership described in subparagraph (B).
“(B) Application Filed
Before October 21, 1983.—A partnership is described in this
subparagraph if—
“(i) before October 21,
1983, the partnership was organized, a request for exemption with
respect to such partnership was filed with the Department of Labor,
and a private placement memorandum stating the maximum number of units
in the partnership that would be offered had been circulated,
“(ii) the interest in
the property to be acquired, directly or indirectly (including through
acquiring an interest in another partnership) by such partnership
was described in such private placement memorandum, and
“(iii) the marketing of
partnership units in such partnership is completed not later than
two years after the later of the date of the enactment of this Act
(July 18, 1984) or the date of publication in the Federal Register
of such exemption by the Department of Labor and the aggregate number
of units in such partnership sold does not exceed the amount described
in clause (i).
“(C) Partnerships For
Which Qualifying Action Existed Before March 6, 1984.—Paragraph
(9) of section 168(j) of the Internal
Revenue Code of 1986 (as added by this section) shall not
apply to any property acquired directly or indirectly, before January
1, 1986, by any partnership described in subparagraph (D). For purposes
of this subparagraph, property shall be deemed to have been acquired
prior to January 1, 1986, if the partnership had entered into a written
binding contract to acquire such property prior to January 1, 1986
and the closing of such contract takes place within 6 months of the
date of such contract (24 months in the case of new construction).
“(D) Partnership Organized
Before March 6, 1984.—A partnership is described in this subparagraph
if—
“(i) before March 6, 1984,
the partnership was organized and publicly announced the maximum amount
(as shown in the registration statement, prospectus or partnership
agreement, whichever is greater) of interests which would be sold
in the partnership, and
“(ii) the marketing or
partnership interests in such partnership was completed not later
than the 90th day after the date of the enactment of this Act (July
18, 1984) and the aggregate amount of interest in such partnership
sold does not exceed the maximum amount described in clause (i).
“(12) Special Rule For Amendment Made By
Subsection (c)(2).—The amendment made by subsection (c)(2) (amending
section 48(g)(2)(B)(i) of this title) to the extent it relates to
subsection (f)(12) of section 168 of the
Internal Revenue Code of 1986 shall take effect as if it
had been included in the amendments made by section 216(a) of the
Tax Equity and Fiscal Responsibility Act of 1982 (section 216(a) of Pub. L. 97-248, which amended this section).
“(13) Special Rule For Service Contracts
Not Involving Tax-Exempt Entities.—In the case of a service
contract or other arrangement described in section 7701(e) of the Internal Revenue Codeof
1986 (as added by this section) with respect to which no party is
a tax-exempt entity, such section 7701(e) shall not apply to—
“(A) such contract or
other arrangement if such contract or other arrangement was entered
into before November 5, 1983, or
“(B) any renewal or other
extension of such contract or other arrangement pursuant to an option
contained in such contract or other arrangement on November 5, 1983.
“(14) Property Leased To Section 593 Organizations.—For
purposes of the amendment made by subsection (f) (enacting section
46(e)(4) of this title), paragraphs (1), (2), and (4) shall be applied
by substituting—
“(A) ‘November 5,
1983' for ‘May 23, 1983’ and ‘November 1, 1983’, as the case may be,
and
“(B) ‘organization described
in section 593 of the Internal Revenue
Code of 1986' for ‘tax-exempt entity’.
“(15) Special rules relating to foreign persons
or entities.—
“(A) In General.—In
the case of tax-exempt use property which is used by a foreign person
or entity, the amendments made by this section shall not apply to
any property which—
“(i) is placed in service
by the taxpayer before January 1, 1984, and
“(ii) is used by such
foreign person or entity pursuant to a lease entered into before January
1, 1984.
“(B) Special Rule For
Subleases.—If tax-exempt use property is being used by a foreign
person or entity pursuant to a sublease under a lease described in
subparagraph (A)(ii), subparagraph (A) shall apply to such property
only if such property was used before January 1, 1984, by any foreign
person or entity pursuant to such lease.
“(C) Binding Contracts,
Etc.—The amendments made by this section shall not apply with
respect to any property (other than aircraft described in subparagraph
(D)) leased to a foreign person or entity—
“(i) if—
“(I) on or before May
23, 1983, the taxpayer (or a predecessor in interest under the contract)
or the foreign person or entity entered into a written binding contract
to acquire, construct, or rehabilitate such property and such property
had not previously been used by the foreign person or entity, or
“(II) the taxpayer or
the foreign person or entity acquired the property or completed the
construction, reconstruction, or rehabilitation of the property after
December 31, 1982 and on or before May 23, 1983, and
“(ii) if such lease is
pursuant to a written binding contract entered into before January
1, 1984, which requires the foreign person or entity to be the lessee
of such property.
“(D) Certain Aircraft.—The
amendments made by this section shall not apply with respect to any
wide-body, four-engine, commercial aircraft used by a foreign person
or entity if—
“(i) on or before November
1, 1983, the foreign person or entity entered into a written binding
contract to acquire such aircraft, and
“(ii) such aircraft is
originally placed in service by such foreign person or entity (or
its successor in interest under the contract) after May 23, 1983,
and before January 1, 1986.
“(E) Use After 1983.—Qualified
container equipment placed in service before January 1, 1984, which
is used before such date by a foreign person shall not, for purposes
of section 47 of the Internal Revenue Code of
1986, be treated as ceasing to be section 38 property by reason of
the use of such equipment before January 1, 1985, by a foreign person
or entity. For purposes of this subparagraph, the term ‘qualified
container equipment’ means any container, container chassis, or container
trailer of a United States person with a present class life of not
more than 6 years.
“(16) Organizations electing exemption from
rules relating to previously tax-exempt organizations must elect taxation
of exempt arbitrage profits.—
“(A) In General.—An
organization may make the election under section 168(j)(4)(E)(ii) of the Internal
Revenue Code of 1986 (relating to election not to have
rules relating to previously tax-exempt organizations apply) only
if such organization elects the tax treatment of exempt arbitrage
profits described in subparagraph (B).
“(B) Taxation of exempt arbitrage profits.—
“(i) In General.—In
the case of an organization which elects the application of this subparagraph,
there is hereby imposed a tax on the exempt arbitrage profits of such
organization.
“(ii) Rate Of Tax, Etc.—The tax imposed
by clause (i)—
“(I) shall be the amount
of tax which would be imposed by section 11 of such Code if the exempt
arbitrage profits were taxable income (and there were no other taxable
income), and
“(II) shall be imposed
for the first taxable year of the tax-exempt use period (as defined
in section 168(j)(4)(E)(ii) of such Code).
“(C) Exempt arbitrage profits.—
“(i) In General.—For
purposes of this paragraph, the term exempt arbitrage profits means
the aggregate amount described in clauses (i) and (ii) of subparagraph
(D) of section 103(c)(6) of such Code for all taxable years for which
the organization was exempt from tax under section 501(a) of such
Code with respect to obligations—
“(I) associated with property
described in section 168(j)(4)(E)(i), and
“(II) issued before January 1, 1985.
“(ii) Application Of Section
103(b)(6).—For purposes of this paragraph, section 103(b)(6)
of such Code shall apply to obligations issued before January 1, 1985,
but the amount described in clauses (i) and (ii) of subparagraph (D)
thereof shall be determined without regard to clauses (i)(II) and
(ii) of subparagraph (F) thereof.
“(D) Other Laws Applicable.—
“(i) In General.—Except
as provided in clause (ii), all provisions of law, including penalties,
applicable with respect to the tax imposed by section 11 of such Code
shall apply with respect to the tax imposed by this paragraph.
“(ii) No Credits Against
Tax, Etc.—The tax imposed by this paragraph shall not be treated
as imposed by section 11 of such Code for purposes of—
“(I) part VI of subchapter
A of chapter 1 of such Code (relating to minimum tax for tax preferences),
and
“(II) determining the
amount of any credit allowable under subpart A of part IV of such
subchapter.
“(E) Election.—Any election under subparagraph
(A)—
“(i) shall be made at
such time and in such manner as the Secretary may prescribe,
“(ii) shall apply to any
successor organization which is engaged in substantially similar activities,
and
“(iii) once made, shall
be irrevocable.
“(17) Certain Transitional Leased Property.—The
amendments made by this section shall not apply to property described
in section 168(c)(2)(D) of the
Internal Revenue Code of 1986, as in effect on the day
before the date of the enactment of this Act (July 18, 1984), and
which is described in any of the following subparagraphs:
“(A) Property is described
in this subparagraph if such property is leased to a university, and—
“(i) on June 16, 1983,
the Board of Administrators of the university adopted a resolution
approving the rehabilitation of the property in connection with an
overall campus development program; and
“(ii) the property houses
a basketball arena and university offices.
“(B) Property is described
in this subparagraph if such property is leased to a charitable organization,
and—
“(i) on August 21, 1981,
the charitable organization acquired the property, with a view towards
rehabilitating the property; and
“(ii) on June 12, 1982,
an arson fire caused substantial damage to the property, delaying
the planned rehabilitation.
“(C) Property is described
in this subparagraph if such property is leased to a corporation that
is described in section 501(c)(3)
of the Internal Revenue Code of 1986 (relating to organizations
exempt from tax) pursuant to a contract—
“(i) which was entered
into on August 3, 1983; and
“(ii) under which the
corporation first occupied the property on December 22, 1983.
“(D) Property is described
in this subparagraph if such property is leased to an educational
institution for use as an Arts and Humanities Center and with respect
to which—
“(i) in November 1982,
an architect was engaged to design a planned renovation;
“(ii) in January 1983,
the architectural plans were completed;
“(iii) in December 1983,
a demolition contract was entered into; and
“(iv) in March 1984, a
renovation contract was entered into.
“(E) Property is described
in this subparagraph if such property is used by a college as a dormitory,
and—
“(i) in October 1981,
the college purchased the property with a view towards renovating
the property;
“(ii) renovation plans
were delayed because of a zoning dispute; and
“(iii) in May 1983, the
court of highest jurisdiction in the State in which the college is
located resolved the zoning dispute in favor of the college.
“(F) Property is described
in this subparagraph if such property is a fraternity house related
to a university with respect to which—
“(i) in August 1982, the
university retained attorneys to advise the university regarding the
rehabilitation of the property;
“(ii) on January 21, 1983,
the governing body of the university established a committee to develop
rehabilitation plans;
“(iii) on January 10,
1984, the governor of the state in which the university is located
approved historic district designation for an area that includes the
property; and
“(iv) on February 2, 1984,
historic preservation certification applications for the property
were filed with a historic landmarks commission.
“(G) Property is described
in this subparagraph if such property is leased to a retirement community
with respect to which—
“(i) on January 5, 1977,
a certificate of incorporation was filed with the appropriate authority
of the state in which the retirement community is located; and
“(ii) on November 22,
1983, the Board of Trustees adopted a resolution evidencing the intention
to begin immediate construction of the property.
“(H) Property is described
in this subparagraph if such property is used by a university, and—
“(i) in July 1982, the
Board of Trustees of the university adopted a master plan for the
financing of the property; and
“(ii) as of August 1,
1983, at least $60,000 in private expenditures had been expended in
connection with the property. In the case of Clemson University, the
preceding sentence applies only to the Continuing Education Center
and the component housing project.
“(I) Property is described
in this subparagraph if such property is used by a university as a
fine arts center and the Board of Trustees of such university authorized
the sale-leaseback agreement with respect to such property on March
7, 1984.
“(J) Property is described
in this subparagraph if such property is used by a tax-exempt entity
as an international trade center, and
“(i) prior to 1982, an
environmental impact study for such property was completed;
“(ii) on June 24, 1981,
a developer made a written commitment to provide one-third of the
financing for the development of such property; and
“(iii) on October 20,
1983, such developer was approved by the Board of Directors of the
tax-exempt entity.
“(K) Property is described
in this subparagraph if such property is used by university of osteopathic
medicine and health sciences, and on or before December 31, 1983,
the Board of Trustees of such university approved the construction
of such property.
“(L) Property is described
in this subparagraph if such property is used by a tax-exempt entity,
and—
“(i) such use is pursuant
to a lease with a taxpayer which placed substantial improvements in
service;
“(ii) on May 23, 1983,
there existed architectural plans and specifications (within the meaning
of sec. 48(g)(1)(C)(ii) of
the Internal Revenue Code of 1986); and
“(iii) prior to May 23,
1983, at least 10 percent of the total cost of such improvements was
actually paid or incurred. Property is described in this subparagraph
if such property was leased to a tax-exempt entity pursuant to a lease
recorded in the Register of Deed of Essex County, New Jersey, on May
7, 1984, and a deed of such property was recorded in the Register
of Deed of Essex County, New Jersey, on May 7, 1984.
“(M) Property is described
in this subparagraph if such property is used as a convention center
and on June 2, 1983, the City Council of the city in which the center
is located provided for over $6 million for the project.
“(18) Special Rule For Amendment Made By
Subsection (c)(1).—
“(A) In General.—The
amendment made by subsection (c)(1) (enacting section 48(g)(2)(B)(vi)
of this title) shall not apply to property—
“(i) leased by the taxpayer
on or before November 1, 1983, or
“(ii) leased by the taxpayer
after November 1, 1983, if on or before such date the taxpayer entered
into a written binding contract requiring the taxpayer to lease such
property.
“(B) Limitation.—Subparagraph
(A) shall apply to the amendment made by subsection (c)(1) only to
the extent such amendment relates to property described in subclause
(II), (III), or (IV) of section
168(j)(3)(B)(ii) of the Internal Revenue Code of 1986 (as
added by this section).
“(19) Special Rule For Certain Energy Management
Contracts.—
“(A) In General.—The
amendments made by subsection (e) (amending section 7701 of this title)
shall not apply to property used pursuant to an energy management
contract that was entered into prior to May 1, 1984.
“(B) Definition Of Energy
Management Contract.—For purposes of subparagraph (A), the term ‘energy
management contract' means a contract for the providing of energy
conservation or energy management services.
“(20) Definitions.—For purposes of
this subsection—
“(A) Tax-Exempt Entity.—The
term ‘tax-exempt entity’ has the same meaning as when used in section 168(j) of the Internal Revenue Code of
1986 (as added by this section), except that such term shall include
any related entity (within the meaning of such section).
“(B) Treatment Of Improvements.—
“(i) In General.—For
purposes of this subsection, an improvement to property shall not
be treated as a separate property unless such improvement is a substantial
improvement with respect to such property.
“(ii) Substantial Improvement.—For
purposes of clause (i), the term ‘substantial improvement’ has the
meaning given such term by section 168(f)(1)(C) of such Code determined—
“(I) by substituting ‘property’
for ‘building’ each place it appears therein,
“(II) by substituting
‘20 percent’ for ‘25 percent’ in clause (ii) thereof, and
“(III) without regard to clause (iii) thereof.
“(C) Foreign Person Or
Entity.—The term ‘foreign person or entity’ has the meaning
given to such term by subparagraph (C) of section 168(j)(4) of such
Code (as added by this section). For purposes of this subparagraph
and subparagraph (A), such subparagraph (C) shall be applied without
regard to the last sentence thereof.
“(D) Leases And Subleases.—The
determination of whether there is a lease or sublease to a tax-exempt
entity shall take into account sections 168(j)(6)(A), 168(j)(8)(A),
and 7701(e) of the Internal Revenue
Code of 1986 (as added by this section).”
(Section 1802(a)(10)(B) of Pub.
L. 99-514 provided in part that amendment by section 1802(a)(10)(B)
of Pub. L. 99-514, amending section
31(g)(15)(D)(ii) of Pub. L. 98-369,
set out above, is effective with respect to property placed in service
by the taxpayer after July 18, 1984.)
(Section 1802(a)(10)(D)(ii) of Pub. L. 99-514 provided that: “The
amendment made by clause (i) (amending section 31(g)(20)(B)(ii) of Pub. L. 98-369, set out above) shall not
apply to any property if—
“(I) on or before March
28, 1985, the taxpayer (or a predecessor in interest under the contract)
or the tax-exempt entity entered into a written binding contract to
acquire, construct, or rehabilitate the property, or
“(II) the taxpayer or
the tax-exempt entity began the construction, reconstruction, or rehabilitation
of the property on or before March 28, 1985.”)
Section 32(c) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, title XVIII, Sec. 1802(b)(2), Oct. 22,
1986, 100 Stat. 2095, 2791,
provided that: “The amendment made by subsection (a) (amending
this section) shall apply to agreements described in section 168(f)(14) of the Internal Revenue
Code of 1986 (formerly I.R.C.
1954) (as added by subsection (a)) entered into more than
90 days after the date of the enactment of this Act (July 18, 1984).”
Section 111(g) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(1) In General.—Except as otherwise
provided in this subsection, the amendments made by this section (amending
sections 48, 51, 168, 312, and 1245 of this title) shall apply with
respect to property placed in service by the taxpayer after March
15, 1984.
“(2) Exception.—The amendments made
by this section shall not apply to property placed in service by the
taxpayer before January 1, 1987, if—
“(A) the taxpayer or a
qualified person entered into a binding contract to purchase or construct
such property before March 16, 1984, or
“(B) construction of such
property was commenced by or for the taxpayer or a qualified person
before March 16, 1984.
For purposes of this paragraph the term ‘qualified
person’ means any person who transfers his rights in such a contract
or such property to the taxpayer, but only if such property is not
placed in service by such person before such rights are transferred
to the taxpayer.
“(3) Special Rules For Application Of Paragraph
(2).—
“(A) Certain inventory.—In the case
of any property which—
“(i) is held by a person as property described
in section 1221(1) (26 U.S.C. 1221(1)),
and
“(ii) is disposed of by
such person before January 1, 1985, such person shall not, for purposes
of paragraph (2), be treated as having placed such property in service
before such property is disposed of merely because such person rented
such property or held such property for rental. No deduction for depreciation
or amortization shall be allowed to such person with respect to such
property,
“(B) Certain Property Financed By Bonds.—In
the case of any property with respect to which—
“(i) bonds were issued
to finance such property before 1984, and
“(ii) an architectural
contract was entered into before March 16, 1984, paragraph (2) shall
be applied by substituting ‘May 2’ for ‘March 16’.
“(4) Special Rule For Components.—For
purposes of applying section 168(f)(1)(B)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as amended by this section)
to components placed in service after December 31, 1986, property
to which paragraph (2) applies shall be treated as placed in service
by the taxpayer before March 16, 1984.
“(5) Special Rule For Mid-Month Convention.—In
the case of the amendment made by subsection (d) (amending subsec.
(b)(2)(A), (B) of this section)—
“(A) paragraph (1) shall
be applied by substituting ‘June 22, 1984’ for ‘March 15, 1984’, and
“(B) paragraph (2) shall
be applied by substituting ‘June 23, 1984’ for ‘March 15, 1984’ each
place it appears.”
Amendment by section 113(a)(2) of Pub. L. 98-369 applicable to property placed
in service after Mar. 15, 1984, in taxable years ending after such
date, see section 113(c)(1) of Pub. L. 98-369,
set out as a note under section 48 of this title.
Section 113(c)(2) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(A) The amendments made by paragraphs (1)
of subsection (b) (amending this section) shall apply to any motion
picture film or video tape placed in service before, on, or after
the date of the enactment of this Act (July 18, 1984), except that
such amendment shall not apply to—
“(i) any qualified film
placed in service by the taxpayer before March 15, 1984, if the taxpayer
treated such film as recovery property for purposes of section 168 of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
on a return of tax under chapter 1 of such Code filed before March
16, 1984, or
“(ii) any qualified film
placed in service by the taxpayer before January 1, 1985, if—
“(I) 20 percent or more of the production
costs of such film were incurred before March 16, 1984, and
“(II) the taxpayer treats
such film as recovery property for purposes of section 168 of such
Code.
No credit shall be allowable under section 38 of
such Code with respect to any qualified film described in clause (ii),
except to the extent provided in section 48(k) of such Code.
“(B) The amendment made by paragraph (2)
and (3) of subsection (b) (amending sections 46, 48, and 168 of this
title) shall apply as if included in the amendments made by section
201(a), 211(a)(1), and 211(f)(1) of the Economic Recovery Tax Act
of 1981 (sections 201(a), 211(a)(1), and 211(f)(1) of Pub. L. 97-34, enacting this section and
amending section 46 of this title).
“(C) The amendment made by paragraph (4)
of subsection (b) (amending section 48 of this title) shall take effect
as if included in the amendments made by section 205(a)(1) of the
Tax Equity and Fiscal Responsibility Act of 1982 (section 205(a)(1)
of Pub. L. 97-248, amending section
48 of this title).
“(D) For purposes of this paragraph, the
terms ‘qualified film’ and ‘production costs’ have the same respective
meanings as when used in section 48(k)
of the Internal Revenue Code of 1986.”
Amendment by section 474(r)(7) of Pub. L. 98-369 applicable to taxable years
beginning after Dec. 31, 1983, and to carrybacks from such years,
see section 475(a) of Pub. L. 98-369,
set out as a note under section 21 of this title.
Amendment by section 612(e) of Pub. L. 98-369 applicable to interest paid
or accrued after Dec. 31, 1984, on indebtedness incurred after Dec.
31, 1984, see section 612(g) of Pub. L. 98-369,
set out as an Effective Date note under section 25 of this title.
Amendment by section 628(b) of Pub. L. 98-369 applicable to property placed
in service after Dec. 31, 1983, with certain conditions and exceptions,
see section 631(b) of Pub. L. 98-369,
set out as a note under section 103 of this title.
EFFECTIVE DATE OF 1983 AMENDMENTS
Amendment by title I of Pub.
L. 97-448 effective, except as otherwise provided, as if
it had been included in the provision of the Economic Recovery Tax
Act of 1981, Pub. L. 97-34, to which
such amendment relates, see section 109 of Pub.
L. 97-448, set out as a note under section 1 of this title.
Section 102(a)(10)(B) of Pub.
L. 97-448, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “The amendment made by
subparagraph (A) (amending this section) shall apply with respect
to property to which the provisions of section
168(f)(8) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as in effect before the
amendments made by the Tax Equity and Fiscal Responsibility Act of
1982 (Pub. L. 97-248)) apply.”
Amendment by section 541 of Pub.
L. 97-424 applicable to taxable years beginning after Dec.
31, 1979, with a special rule for periods beginning before Mar. 1,
1980, see section 541(c) of Pub. L. 97-424,
set out as a note under section 46 of this title.
EFFECTIVE DATE OF 1982 AMENDMENTS
Amendment by Pub. L. 97-354 applicable
to taxable years beginning after Dec. 31, 1982, see section 6(a) of Pub. L. 97-354, set out as an Effective
Date note under section 1361 of this title.
Section 208(d) of Pub.
L. 97-248, as amended by Pub. L.
97-448, title III, Sec. 306(a)(4), Jan. 12, 1983, 96 Stat. 2400; Pub.
L. 98-369, div. A, title X, Sec. 1067(a), July 18, 1984, 98 Stat. 1048; Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(1) In General.—Except as otherwise
provided in this subsection, the amendments made by subsections (a)
and (b) of this section (amending this section and section 47 of this
title) shall apply to agreements entered into after July 1, 1982,
or to property placed in service after July 1, 1982.
“(2) Transitional Rule For Certain Safe Harbor
Lease Property.—
“(A) In General.—The
amendments made by subsections (a) and (b) (amending this section
and section 47 of this title) shall not apply to transitional safe
harbor lease property.
“(B) Special rule for
certain provisions.—Subparagraph (A) shall not apply with respect
to the provisions of paragraph (6) of section
168(i) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as added by subsection
(a)(1)), to the provisions of section 168(f)(8)(J) of such Code (as
added by subsection (b)(4)), or to the amendment made by subsection
(b)(1).
“(3) Transitional Safe Harbor Lease Property.—For
purposes of this subsection, the term ‘transitional safe harbor lease
property’ means property described in any of the following subparagraphs:
“(A) In General.—Property
is described in this subparagraph if such property is placed in service
before January 1, 1983, if
“(i) with respect to such
property a binding contract to acquire or to construct such property
was entered into by the lessee after December 31, 1980, and before
July 2, 1982, or
“(ii) such property was
acquired by the lessee, or construction of such property was commenced
by or for the lessee, after December 31, 1980, and before July 2,
1982.
“(B) Certain qualified
lessees.—Property is described in this subparagraph if such
property is placed in service before July 1, 1982, and with respect
to which—
“(i) an agreement to which section 168(f)(8)(A) of the Internal Revenue
Code of 1986 applies was entered into before August 15,
1982, and
“(ii) the lessee under
such agreement is a qualified lessee (within the meaning of paragraph
(6)).
“(C) Automotive Manufacturing
Property.—
“(i) In General.—Property
is described in this subparagraph if—
“(I) such property is
used principally by the taxpayer directly in connection with the trade
or business of the taxpayer of the manufacture of automobiles or light-duty
trucks,
“(II) such property is
automotive manufacturing property, and
“(III) such property would
be described in subparagraph (A) if ‘October 1’ were substituted for
‘January 1’.
“(ii) Light-Duty Truck.—For
purposes of this subparagraph, the term ‘light-duty truck’ means any
truck with a gross vehicle weight of 13,000 pounds or less. Such term
shall not include any truck tractor.
“(iii) Automotive Manufacturing
Property.—For purposes of this subparagraph, the term ‘automotive
manufacturing property’ means machinery, equipment, and special tools
of the type included in the former asset depreciation range guideline
classes 37.11 and 37.12.
“(iv) Special Tools Used
By Certain Vendors.—For purposes of this subparagraph, any special
tools owned by a taxpayer described in subclause (I) of clause (i)
which are used by a vendor solely for the production of component
parts for sale to the taxpayer shall be treated as automotive manufacturing
property used directly by such taxpayer.
“(D) Certain Aircraft.—Property
is described in this subparagraph if such property—
“(i) is a commercial passenger
aircraft (other than a helicopter), and
“(ii) would be described
in subparagraph (A) if ‘January 1, 1984’ were substituted for ‘January
1, 1983’. For purposes of determining whether property described in
this subparagraph is described in subparagraph (A), subparagraph (A)(ii)
shall be applied by substituting ‘June 25, 1981’ for ‘December 31,
1980’ and by substituting ‘February 20, 1982’ for ‘July 2, 1982’ and
construction of the aircraft shall be treated as having been begun
during the period referred to in subparagraph (A)(ii) if during such
period construction or reconstruction of a subassembly was commenced,
or the stub wing join occurred.
“(E) Turbines And Boilers.—Property
is described in this subparagraph if such property—
“(i) is a turbine or boiler
of a cooperative organization engaged in the furnishing of electric
energy to persons in rural areas, and
“(ii) would be property
described in subparagraph (A) if ‘July 1’ were substituted for ‘January
1’. For purposes of determining whether property described in this
subparagraph is described in subparagraph (A), such property shall
be treated as having been acquired during the period referred to in
subparagraph (A)(ii) if at least 20 percent of the cost of such property
is paid during such period.
“(F) Property Used In
The Production Of Steel.—Property is described in this subparagraph
if such property—
“(i) is used by the taxpayer
directly in connection with the trade or business of the taxpayer
of the manufacture or production of steel, and
“(ii) would be described
in subparagraph (A) if ‘January 1, 1984’ were substituted for ‘January
1, 1983’.
“(G) Coal Gasification
Facilities.—
“(i) In General.—Property
is described in this subparagraph if such property—
“(I) is used directly
in connection with the manufacture or production of low sulfur gaseous
fuel from coal, and
“(II) would be described
in subparagraph (A) if ‘July 1, 1984’ were substituted for ‘January
1, 1983’.
“(ii) Special rule.—For
purposes of determining whether property described in this subparagraph
is described in subparagraph (A), such property shall be treated as
having been acquired during the period referred to in subparagraph
(A)(ii) if at least 20 percent of the cost of such property is paid
during such period.
“(iii) Limitation On Amount.—Clause
(i) shall only apply to the lease of an undivided interest in the
property in an amount which does not exceed the lesser of—
“(I) 50 percent of the
cost basis of such property, or
“(II) $67,500,000.
“(iv) Placed In Service.—In
the case of property to which this subparagraph applies—
“(I) such property shall
be treated as placed in service when the taxpayer receives an operating
permit with respect to such property from a State environmental protection
agency, and
“(II) the term of the
lease with respect to such property shall be treated as being 5 years.
“(4) Special Rule For Antiavoidance Provisions.—The
provisions of paragraph (6) of section 168(i) of such Code (as added
by subsection (a)(1)), and the amendment made by subsection (b)(1)
(amending this section) shall apply to leases entered into after February
19, 1982, in taxable years ending after such date.
“(5) Special Rule For Mass Commuting Vehicles.—The
amendments made by this section (other than section 168(i)(1) and
(7) of such Code, as added by subsection (a)(1) or section 168(f)(8)(J)
of such Code, as added by subsection (b)(4)) and section 209 (amending
this section and section 48 of this title) shall not apply to qualified
leased property described in section 168(f)(8)(D)(V) of such Code
(as in effect after the amendments made by this section) which—
“(A) is placed in service
before January 1, 1988, or
“(B) is placed in service after such date—
“(i) pursuant to a binding
contract or commitment entered into before April 1, 1983, and
“(ii) solely because of
conditions which, as determined by the Secretary of the Treasury or
his delegate, are not within the control of the lessor or lessee.
“(6) Qualified lessee defined.—
“(A) In General.—The
term ‘qualified lessee’ means a taxpayer which is a lessee of an agreement
to which section 168(f)(8)(A) of such Code applies and which—
“(i) had net operating
losses in each of the three most recent taxable years ending before
July 1, 1982, and had an aggregate net operating loss for the five
most recent taxable years ending before July 1, 1982, and
“(ii) which uses the property
subject to the agreement to manufacture and produce within the United
States a class of products in an industry with respect to which—
“(I) the taxpayer produced
less than 5 percent of the total number of units (or value) of such
products during the period covering the three most recent taxable
years of the taxpayer ending before July 1, 1982, and
“(II) four or fewer United
States persons (including as one person an affiliated group as defined
in section 1504(a)) other than the taxpayer manufactured 85 percent
or more of the total number of all units (or value) within such class
of products manufactured and produced in the United States during
such period.
“(B) Class Of Products.—For
purposes of subparagraph (A)—
“(i) the term ‘class of
products’ means any of the categories designated and numbered as a
‘class of products’ in the 1977 Census of Manufacturers compiled and
published by the Secretary of Commerce under title 13 of the United
States Code, and
“(ii) information—
“(I) compiled or published
by the Secretary of Commerce, as part of or in connection with the
Statistical Abstract of the United States or the Census of Manufacturers,
regarding the number of units (or value) of a class of products manufactured
and produced in the United States during any period, or
“(II) if information under
subclause (I) is not available, so compiled or published with respect
to the number of such units shipped or sold by such manufacturers
during any period, shall constitute prima facie evidence of the total
number of all units of such class of products manufactured and produced
in the United States in such period.
“(6) Underpayments Of Tax For 1982.—No
addition to the tax shall be made under section
6655 of the Internal Revenue Code of 1954 (relating to
failure by corporation to pay estimated income tax) for any period
before October 15, 1982, with respect to any underpayment of estimated
tax by a taxpayer with respect to any tax imposed by chapter 1 of
such Code to the extent that such underpayment was created or increased
by any provision of this section.
“(7) Coordination With At Risk Rules.—Subparagraph
(J) of section 168(f)(8) of the Internal
Revenue Code of 1986 (as added by subsection (b)(4)) shall
take effect as provided in such subparagraph (J).”
(Section 1067(c) of Pub.
L. 98-369 provided that: “The amendment made by subsection
(a) (enacting section 208(d)(3)(G) of Pub.
L. 97-248, set out above) shall take effect as if included
in the provision of section 208(d)(3) of the Tax Equity and Fiscal
Responsibility Act of 1982 (Pub. L. 97-248).”
Section 209(d) of Pub.
L. 97-248; as amended by Pub. L.
98-369, div. A, title I, Sec. 12(a)(1), (2), July 18, 1984, 98 Stat. 503, provided that:
“(1) Subsection (a).—
“(A) In General.—Except
as provided in subparagraph (B) and paragraph (2), the amendments
made by this section (amending this section and section 48 of this
title) shall apply to agreements entered into after December 31, 1987.
“(B) Special rule for farm property aggregating
$150,000 or less.—
“(i) In General.—The
amendments made by subsection (a) (amending this section) shall also
apply to any agreement entered into after July 1, 1982, and before
January 1, 1988, if the property subject to such agreement is section
38 property which is used for farming purposes (within the meaning
of section 2032A(e)(5)).
“(ii) $150,000 Limitation.—The
provisions of clause (i) shall not apply to any agreement if the sum
of—
“(I) the cost basis of
the property subject to the agreement, plus
“(II) the cost basis of
any property subject to an agreement to which this subparagraph previously
applied, which was entered into during the same calendar year, and
with respect to which the lessee was the lessee of the agreement described
in subclause (I) (or any related person within the meaning of section
168(e)(4)(D)), exceeds $150,000. For purposes of subclause (II), in
the case of an individual, there shall not be taken into account any
agreement of any individual who is a related person involving property
which is used in a trade or business of farming of such related person
which is separate from the trade or business of farming of the lessee
described in subclause (II).
“(2) Special rule for definition of new section
38 property.—The amendment made by subsection (c) (amending
section 48 of this title) shall apply to property placed in service
after December 31, 1983.”
Section 216(b) of Pub.
L. 97-248, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(1) In General.—Except as otherwise
provided in this subsection, the amendments made by this section (amending
this section) shall apply with respect to property placed in service
after December 31, 1982, to the extent such property is financed by
the proceeds of an obligation (including a refunding obligation) issued
after June 30, 1982.
“(2) Exceptions.—
“(A) Construction Or Binding
Agreement.—The amendments made by this section (amending this
section) shall not apply with respect to facilities the original use
of which commences with the taxpayer and—
“(i) the construction,
reconstruction, or rehabilitation of which began before July 1, 1982,
or
“(ii) with respect to
which a binding agreement to incur significant expenditures was entered
into before July 1, 1982.
“(B) Refunding.—
“(i) In General.—Except
as provided in clause (ii), in the case of property placed in service
after December 31, 1982 which is financed by the proceeds of an obligation
which is issued solely to refund another obligation which was issued
before July 1, 1982, the amendments made by this section (amending
this section) shall apply only with respect to the basis in such property
which has not been recovered before the date such refunding obligation
is issued.
“(ii) Significant Expenditures.—In
the case of facilities the original use of which commences with the
taxpayer and with respect to which significant expenditures are made
before January 1, 1983, the amendments made by this section shall
not apply with respect to such facilities to the extent such facilities
are financed by the proceeds of an obligation issued solely to refund
another obligation which was issued before July 1, 1982.
In the case of an inducement resolution adopted
by an issuing authority before July 1, 1982, for purposes of applying
subparagraphs (A)(i) and (B)(ii) with respect to obligations described
in such resolution, the term ‘facilities’ means the facilities described
in such resolution.
“(3) Certain Projects For Residential Real
Property.—For purposes of clause (i) of section 168(f)(12)(C) of the Internal Revenue
Code of 1986 (formerly I.R.C.
1954) (as added by this section), any obligation issued
to finance a project described in the table contained in paragraph
(1) of section 1104(n) of the Mortgage Subsidy Bond Tax Act of 1980
(section 1104(n) of Pub. L. 96-499,
set out as a note under section 103A of this title) shall be treated
as an obligation described in section
103(b)(4)(A) of the Internal Revenue Code of 1986.”
Amendment by section 224(c)(1), (2) of Pub. L. 97-248 to apply to any target corporation,
within the meaning of section 338 of this title, with respect to which
the acquisition date, within the meaning of such section, occurs after
Aug. 31, 1982, and also to apply to certain acquisitions before September
1, 1982, but not to apply in the case of certain acquisitions of financial
institutions, see section 224(d) of Pub.
L. 97-248, set out as an Effective Date note under section
338 of this title.
EFFECTIVE DATE
Section 209(a)–(c) of Pub.
L. 97-34, as amended by Pub. L.
97-448, title I, Sec. 102(d)(1), (g), Jan. 12, 1983, 96 Stat. 2370; Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(a) General Rule.—Except as otherwise
provided in this section, the amendments made by this subtitle (subtitle
A (Sec. 201-209) of title II of Pub. L. 97-34,
enacting this section, amending sections 44E, 46, 50A, 53, 57, 167,
172, 179, 263, 312, 381, 453, 812, 825, 964, 1033, 1245, and 1250
of this title, and enacting provisions set out as notes under sections
46, 167, and 168 of this title) shall apply to property placed in
service after December 31, 1980, in taxable years ending after such
date.
“(b) Special Rule for RRB Property.—The
amendment made by subsection (c) of section 203 (amending section
167 of this title and enacting provisions set out as notes under section
167 of this title) shall take effect on January 1, 1981, and shall
apply with respect to taxable years ending after such date.
“(c) Special Rule for Carryovers.—
“(1)(A) Except as provided
in subparagraph (B), the amendments made by subsections (a) and (b)
of section 207 (amending sections 172, 812, and 825 of this title)
shall apply to net operating losses in taxable years ending after
December 31, 1975.
“(B) The amendments made
by subparagraph (B)(i) of section 207(a)(2) (amending section 172
of this title) shall take effect as if they had been included in the
amendments made by section 1(a) of Public
Law 96-595 (amending section 172 of this title); except
that the amendments made by such subparagraph shall apply only to
net operating losses in taxable years ending after December 31, 1972.
“(C) If any net operating
loss for any taxable year ending on or before December 31, 1975, could
be a net operating loss carryover to a taxable year ending in 1981
by reason of subclause (II) of section
172(b)(1)(E)(ii) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as in effect on the day
before the date of the enactment of this Act (Aug. 13, 1981) and as
modified by section 1(b) of Public Law 96-595 (set
out as an Effective Date of 1980 Amendment note under section 172
of this title)), such net operating loss shall be a net operating
loss carryover under section 172 of such Code to each of the 15 taxable
years following the taxable year of such loss.
“(2)(A) The amendments
made by subsection (c)(1) of section 207 (amending sections 46 and
50A of this title) shall apply to unused credit years ending after
December 31, 1973.
“(B) The amendment made
by subsection (c)(2) of section 207 (amending section 53 of this title)
shall apply to unused credit years beginning after December 31, 1976.
“(C) The amendments made
by subsection (c)(3) of section 207 (amending section 44E of this
title) shall apply to unused credit years ending after September 30,
1980.
“(3) Carryover must have
been alive in 1981.—The amendments made by subsections (a),
(b), and (c) of section 207 (amending sections 44E, 46, 50A, 53, 172,
812, and 825 of this title) shall not apply to any amount which, under
the law in effect on the day before the date of the enactment of this
Act (Aug. 13, 1981), could not be carried to a taxable year ending
in 1981.”
SECTION 168(k)(6) SPECIAL RULE
Pub. L. 115-141,
Div. U, Sec. 101(d)(3), provided:
“(3) For purposes of applying section 168(k) of the Internal Revenue Code of
1986, as in effect on the day before the date of the enactment of Public Law 115-97, with respect to property
acquired before September 28, 2017, paragraph (6) thereof shall be
treated as reading as follows (and as having been included in section
143 of the Protecting Americans from Tax Hikes Act of 2015):
“(6) Phase-Down.—In the case of qualified
property placed in service by the taxpayer after December 31, 2017
(December 31, 2018, in the case of property described in subparagraph
(B) or (C) of paragraph (2)), paragraph (1)(A) shall be applied by
substituting for ‘50 percent’—
“(A) ‘40 percent’ in the case
of—
“(i) property placed in service in 2018 (other
than property described in subparagraph (B) or (C) of paragraph (2)),
and
“(ii) property described in subparagraph
(B) or (C) of paragraph (2) which is placed in service in 2019, and
“(B) ‘30 percent’ in the case
of—
“(i) property placed in service in 2019 (other
than property described in subparagraph (B) or (C) of paragraph (2)),
and
“(ii) property described in subparagraph
(B) or (C) of paragraph (2) which is placed in service in 2020.“.
SECTION 168(k)(7) SPECIAL RULE
Pub. L. 115-141,
Div. U, Sec. 101(d)(4), provided:
“(4) Section
168(k)(7) of the Internal Revenue Code of 1986, as in effect
on the day before the date of the enactment of Public
Law 115-97, shall be applied—
“(A) by substituting ‘paragraphs (1),
(2)(F), and (4)‘ for ‘paragraphs (1) and (2)(F)‘,
and
“(B) as if the application of such substitution
had been included in section 143 of the Protecting Americans from
Tax Hikes Act of 2015.”
NORMALIZATION REQUIREMENTS
Pub. L. 115-97,
Sec. 13001(d), provided:
“(d) Normalization Requirements.—
“(1) In General.—A normalization method
of accounting shall not be treated as being used with respect to any
public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 1986
if the taxpayer, in computing its cost of service for ratemaking purposes
and reflecting operating results in its regulated books of account,
reduces the excess tax reserve more rapidly or to a greater extent
than such reserve would be reduced under the 11 average rate assumption
method.
“(2) Alternative Method For Certain Taxpayers.—If,
as of the first day of the taxable year that includes the date of
enactment of this Act—
“(A) the taxpayer was required by a regulatory
agency to compute depreciation for public utility property on the
basis of an average life or composite rate method, and
“(B) the taxpayer's books and underlying
records did not contain the vintage account data necessary to apply
the average rate assumption method, the taxpayer will be treated as
using a normalization method of accounting if, with respect to such
jurisdiction, the taxpayer uses the alternative method for public
utility property that is subject to the regulatory authority of that
jurisdiction.
“(3) Definitions.—For purposes of this
subsection—
“(A) Excess Tax Reserve.—The term ‘excess
tax reserve‘ means the excess of—
“(i) the reserve for deferred taxes (as described
in section 168(i)(9)(A)(ii)
of the Internal Revenue Code of 1986) as of the day before
the corporate rate reductions provided in the amendments made by this
section take effect, over
“(ii) the amount which would be the balance
in such reserve if the amount of such reserve were determined by assuming
that the corporate rate reductions provided in this Act were in effect
for all prior periods.
(B) Average Rate Assumption Method.—The average
rate assumption method is the method under which the excess in the
reserve for deferred taxes is reduced over the remaining lives of
the property as used in its regulated books of account which gave
rise to the reserve for deferred taxes. Under such method, during
the time period in which the timing differences for the property reverse,
the amount of the adjustment to the reserve for the deferred taxes
is calculated by multiplying—
(i) the ratio of the aggregate deferred taxes for
the property to the aggregate timing differences for the property
as of the beginning of the period in question, by
(ii) the amount of the timing differences which
reverse during such period.
“(C) Alternative Method.—The ‘alternative
method’ is the method in which the taxpayer—
“(i) computes the excess tax reserve on all
public utility property included in the plant account on the basis
of the weighted average life or composite rate used to compute depreciation
for regulatory purposes, and
“(ii) reduces the excess tax reserve ratably
over the remaining regulatory life of the property.
“(4) Tax Increased For Normalization Violation.—If,
for any taxable year ending after the date of the enactment of this
Act, the taxpayer does not use a normalization method of accounting
for the corporate rate reductions provided in the amendments made
by this section—
“(A) the taxpayer's tax for the taxable
year shall be increased by the amount by which it reduces its excess
tax reserve more rapidly than permitted under a normalization method
of accounting, and
“(B) such taxpayer shall not be treated as
using a normalization method of accounting for purposes of subsections
(f)(2) and (i)(9)(C) of section 168 of
the Internal Revenue Code of 1986.”
DEPRECIATION STUDY
“The Secretary of the Treasury (or the Secretary's
delegate)—
“(1) shall conduct a comprehensive study
of the recovery periods and depreciation methods under section 168 of the Internal Revenue Code of
1986, and
“(2) not later than March 31, 2000, shall
submit the results of such study, together with recommendations for
determining such periods and methods in a more rational manner, to
the Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate.”
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be construed to affect
treatment of certain transactions occurring, property acquired, or
items of income, loss, deduction, or credit taken into account prior
to Nov. 5, 1990, for purposes of determining liability for tax for
periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under
section 29 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1,
1989
For provisions directing that if any amendments
made by subtitle A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177)
or title XVIII (Sec. 1800-1899A) of Pub.
L. 99-514 require an amendment to any plan, such plan amendment
shall not be required to be made before the first plan year beginning
on or after Jan. 1, 1989, see section 1140 of Pub.
L. 99-514, as amended, set out as a note under section 401
of this title.
TREATMENT OF CERTAIN FARM FINANCE LEASES
Section 1801(a)(2) of Pub.
L. 99-514, as amended by Pub.
L. 100-647, title I, Sec. 1018(a), Nov. 10, 1988, 102 Stat. 3577, provided that:
“(A) In General.—If—
“(i) any partnership or
grantor trust is the lessor under a specified agreement,
“(ii) such partnership
or grantor trust met the requirements of section 168(f)(8)(C)(i) of the Internal
Revenue Code of 1954 (relating to special rules for finance
leases) when the agreement was entered into, and
“(iii) a person became
a partner in such partnership (or a beneficiary in such trust) after
its formation but before September 26, 1985, then, for purposes of
applying the revenue laws of the United States in respect to such
agreement, the portion of the property allocable to partners (or beneficiaries)
not described in clause (iii) shall be treated as if it were subject
to a separate agreement and the portion of such property allocable
to the partner or beneficiary described in clause (iii) shall be treated
as if it were subject to a separate agreement.
“(B) Specified Agreement.—For purposes
of subparagraph (A), the term ‘specified agreement’ means an agreement
to which subparagraph (B) of section 209(d)((1)) of the Tax Equity
and Fiscal Responsibility Act of 1982 (section 209(d)(1) of Pub. L. 97-248, set out as a note above)
applies which is—
“(i) an agreement dated
as of December 20, 1982, as amended and restated as of February 1,
1983, involving approximately $8,734,000 of property at December 31,
1983,
“(ii) an agreement dated
as of December 15, 1983, as amended and restated as of January 3,
1984, involving approximately $13,199,000 of property at December
31, 1984, or
“(iii) an agreement dated
as of October 25, 1984, as amended and restated as of December 1,
1984, involving approximately $966,000 of property at December 31,
1984.”
CERTAIN RESIDENTIAL REAL PROPERTY TREATED AS
RESIDENTIAL RENTAL PROPERTY
Section 1809(a)(4)(C) of Pub.
L. 99-514 provided that: “Any property described in
paragraph (3) of section 631(d) of the Tax Reform Act of 1984 (section
631(d) of Pub. L. 99-369, set out
as a note under section 103 of this title) shall be treated as property
described in clause (ii) of section
168(f)(12)(C) of the Internal Revenue Code of 1954 (now
1986) as amended by subparagraph (B).”
COORDINATION WITH IMPUTED INTEREST CHANGES
Section 1809(a)(5) of Pub.
L. 99-514 provided that: “In the case of any property
placed in service before May 9, 1985 (or treated as placed in service
before such date by section 105(b)(3) of Public
Law 99-121 (set out as a note above))—
“(A) any reference in any amendment made
by this subsection (amending sections 57, 168, and 312 of this title)
to 19-year real property shall be treated as a reference to 18-year
real property, and
“(B) section
168(f)(12)(B)(ii) of the Internal Revenue Code of 1954
(now 1986) (as amended by paragraph (4)(A)) shall be applied by substituting
‘18 years’ for ‘19 years’.”
TERMINATION OF SAFE HARBOR LEASING RULES
Section 12(b) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “Paragraph (8) of section 168(f) of the Internal Revenue Codeof
1986 (formerly I.R.C. 1954)
(relating to special rules for leasing), as in effect after the amendments
made by section 208 of the Tax Equity and Fiscal Responsibility Act
of 1982 (Pub. L. 97-248) but before
the amendments made by section 209 of such Act, shall not apply to
agreements entered into after December 31, 1983. The preceding sentence
shall not apply to property described in paragraph (3)(G) or (5) of
section 208(d) of such Act (set out as an Effective Date of 1982 Amendments
note above).”
TRANSITIONAL RULES FOR 1984 AMENDMENT
Section 12(c) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, title XVIII, Sec. 1801(a)(1), Oct. 22,
1986, 100 Stat. 2095, 2785; Pub. L. 100-647, title I, Sec. 1002(d)(7)(B),
Nov. 10, 1988, 102 Stat. 3360,
provided that:
“(1) In General.—The amendments made
by subsection (a) (amending this section and section 208(d) of Pub. L. 97-248, set out as an Effective
Date of 1982 Amendments note above) shall not apply with respect to
any property if—
“(A) a binding contract
to acquire or to construct such property was entered into by or for
the lessee before March 7, 1984, or
“(B) such property was
acquired by the lessee, or the construction of such property was begun,
by or for the lessee, before March 7, 1984.
The preceding sentence shall not apply to any property
with respect to which an election is made under this sentence at such
time after the date of the enactment of the Tax Reform Act of 1986
(Oct. 22, 1986) as the Secretary of the Treasury or his delegate may
prescribe.
“(2) Special Rule For Certain Automotive
Property.—
“(A) In General.—The
amendments made by subsection (a) shall not apply to property—
“(i) which is automotive manufacturing property,
and
“(ii) with respect to
which the lessee is a qualified lessee (within the meaning of section
208(d)(6) of the Tax Equity and Fiscal Responsibility Act of 1982)
(Pub. L. 97-248, set out as an
Effective Date of 1982 Amendments note above).
“(B) $150,000,000 limitation.—The
provisions of subparagraph (A) shall not apply to any agreement if
the sum of—
“(i) the cost basis of
the property subject to the agreement, plus
“(ii) the cost basis of
any property subject to an agreement to which subparagraph (A) previously
applied and with respect to which the lessee was the lessee under
the agreement described in clause (i) (or any related person within
the meaning of section 168(e)(4)(D)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)), exceeds $150,000,000.
“(C) Automotive manufacturing
property.—For purposes of this paragraph, the term ‘automotive
manufacturing property’ means—
“(i) property used principally
by the taxpayer directly in connection with the trade or business
of the taxpayer of the manufacturing of automobiles or trucks (other
than truck tractors) with a gross vehicle weight of 13,000 pounds
or less,
“(ii) machinery, equipment,
and special tools of the type included in former depreciation range
guideline classes 37.11 and 37.12, and
“(iii) any special tools
owned by the taxpayer which are used by a vendor solely for the production
of component parts for sale to the taxpayer.
“(3) Special rule for certain cogeneration
facilities.—The amendments made by subsection (a) shall not
apply with respect to any property which is part of a coal-fired cogeneration
facility—
“(A) for which an application
for certification was filed with the Federal Energy Regulatory Commission
on December 30, 1983,
“(B) for which an application
for a construction permit was filed with a State environmental protection
agency on February 20, 1984, and
“(C) which is placed in
service before January 1, 1988.”
SPECIAL LEASING RULE REGARDING COAL GASIFICATION
FACILITIES
Section 1067(b) of Pub.
L. 98-369, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “The amount of any recapture
under section 47 of the Internal Revenue
Code of 1986 (formerly I.R.C.
1954) with respect to the credit allowed under section
38 of such Code with respect to progress expenditures (within the
meaning of section 46(d) of such Code) shall apply only to the percentage
of the cost basis of the coal gasification facility to which the amendment
made by subsection (a) (amending section 208(d) of Pub. L. 97-248, set out as an Effective
Date of 1982 Amendments note above) applies.”
CERTAIN LEASES BEFORE OCTOBER 20, 1981, TREATED
AS QUALIFIED LEASES
Section 208(c) of Pub.
L. 97-248, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “Nothing in paragraph (8)
of section 168(f) of the Internal Revenue
Code of 1986 (formerly I.R.C.
1954), or in any regulations prescribed thereunder, shall
be treated as making such paragraph inapplicable to any agreement
entered into before October 20, 1981, solely because under such agreement
1 party to such agreement is entitled to the credit allowable under
section 38 of such Code with respect to property and another party
to such agreement is entitled to the deduction allowable under section
168 of such Code with respect to such property. Section 168(f)(8)(B)(ii)
of such Code shall not apply to the party entitled to such credit.”
MOTOR VEHICLE OPERATING LEASES
Section 210 of Pub. L.
97-248, as amended by Pub. L. 98-369,
div. A, title I, Sec. 32(b), title VII, Sec. 712(d), July 18, 1984, 98 Stat. 531, 947; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
“(a) In General.—In the case of any
qualified motor vehicle agreement entered into on or before the 90th
day after the date of the enactment of the Tax Reform Act of 1984
(July 18, 1984), the fact that such agreement contains a terminal
rental adjustment clause shall not be taken into account in determining
whether such agreement is a lease.
“(b) Definitions.—For purposes of this
section—
“(1) Qualified motor vehicle
agreement.—The term ‘qualified motor vehicle agreement’ means
any agreement with respect to a motor vehicle (including a trailer)—
“(A) which was entered
into before—
“(i) the enactment of
any law, or
“(ii) the publication
by the Secretary of the Treasury or his delegate of any regulation,
which provides that any agreement with a terminal rental adjustment
clause is not a lease,
“(B) with respect to which
the lessor under the agreement—
“(i) is personally liable
for the repayment of, or
“(ii) has pledged property
(but only to the extent of the net fair market value of the lessor's
interest in such property), other than property subject to the agreement
or property directly or indirectly financed by indebtedness secured
by property subject to the agreement, as security for, all amounts
borrowed to finance the acquisition of property subject to the agreement,
and
“(C) with respect to which
the lessee under the agreement uses the property subject to the agreement
in a trade or business or for the production of income.
“(2) Terminal Rental Adjustment
Clause.—The term ‘terminal rental adjustment clause’ means a
provision of an agreement which permits or requires the rental price
to be adjusted upward or downward by reference to the amount realized
by the lessor under the agreement upon sale or other disposition of
such property. Such term also includes a provision of an agreement
which requires a lessee who is a dealer in motor vehicles to purchase
the motor vehicle for a predetermined price and then resell such vehicle
where such provision achieves substantially the same results as a
provision described in the preceding sentence.
“(c) Exception Where Lessee Took Position
on Return.—Subsection (a) shall not apply to deny a deduction
for interest paid or accrued claimed by a lessee with respect to a
qualified motor vehicle agreement on a return of tax imposed by chapter 1 of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) which
was filed before the date of the enactment of this Act (Sept. 3, 1982)
or to deny a credit for investment in depreciable property claimed
by the lessee on such a return pursuant to an agreement with the lessor
that the lessor would not claim the credit.”
INFORMATION RETURNS WITH RESPECT TO SAFE HARBOR
LEASES
Pub. L. 97-119,
title I, Sec. 112, Dec. 29, 1981, 95 Stat.
1640, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that:
“(a) Requirement of Return.—
“(1) In General.—Except
as provided in paragraph (2), paragraph (8) of section 168(f) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
(relating to special rule for leases) shall not apply with respect
to an agreement unless a return, signed by the lessor and lessee and
containing the information required to be included in the return pursuant
to subsection (b), has been filed with the Internal Revenue Service
not later than the 30th day after the date on which the agreement
is executed.
“(2) Special rules for
agreements executed before january 1, 1982.—
“(A) In General.—In
the case of an agreement executed before January 1, 1982, such agreement
shall cease on February 1, 1982, to be treated as a lease under section
168(f)(8) unless a return, signed by the lessor and containing the
information required to be included in subsection (b), has been filed
with the Internal Revenue Service not later than January 31, 1982.
“(B) Filing By Lessee.—If
the lessor does not file a return under subparagraph (A), the return
requirement under subparagraph (A) shall be satisfied if such return
is filed by the lessee before January 31, 1982.
“(3) Certain Failure To
File.—If—
“(A) a lessor or lessee
fails to file any return within the time prescribed by this subsection,
and
“(B) such failure is shown
to be due to reasonable cause and not due to willful neglect, the
lessor or lessee shall be treated as having filed a timely return
if a return is filed within a reasonable time after the failure is
ascertained.
“(b) Information Required.—The information
required to be included in the return pursuant to this subsection
is as follows:
“(1) The name, address,
and taxpayer identifying number of the lessor and the lessee (and
parent company if a consolidated return is filed);
“(2) The district director's
office with which the income tax returns of the lessor and lessee
are filed;
“(3) A description of
each individual property with respect to which the election is made;
“(4) The date on which
the lessee places the property in service, the date on which the lease
begins and the term of the lease;
“(5) The recovery property
class and the ADR midpoint life of the leased property;
“(6) The payment terms
between the parties to the lease transaction;
“(7) Whether the ACRS
deductions and the investment tax credit are allowable to the same
taxpayer;
“(8) The aggregate amount
paid to outside parties to arrange or carry out the transaction;
“(9) For the lessor only:
the unadjusted basis of the property as defined in section 168(d)(1);
“(10) For the lessor only:
if the lessor is a partnership or a grantor trust, the name, address,
and taxpayer identifying number of the partners or the beneficiaries,
and the district director's office with which the income tax return
of each partner or beneficiary is filed; and
“(11) Such other information
as may be required by the return or its instructions.
Paragraph (8) shall not apply with respect to any
person for any calendar year if it is reasonable to estimate that
the aggregate adjusted basis of the property of such person which
will be subject to subsection (a) for such year is $1,000,000 or less.
“(c) Coordination With Other Information
Requirements.—In the case of agreements executed after December
31, 1982, to the extent provided in regulations prescribed by the
Secretary of the Treasury or his delegate, the provisions of this
section shall be modified to coordinate such provisions with the other
information requirements of the Internal Revenue Code of 1986.”
REGULATED PUBLIC UTILITIES; SPECIAL TRANSITIONAL
RULE FOR NORMALIZATION REQUIREMENTS
Section 209(d)(1) of Pub.
L. 97-34, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “If, by the terms of the
applicable rate order last entered before the date of the enactment
of this Act (Aug. 13, 1981) by a regulatory commission having appropriate
jurisdiction, a regulated public utility would (but for this provision)
fail to meet the requirements of section
168(e)(3) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) with respect to property
because, for an accounting period ending after December 31, 1980,
such public utility used a method of accounting other than a normalization
method of accounting, such regulated public utility shall not fail
to meet such requirements if, by the terms of its first rate order
determining cost of service with respect to such property which becomes
effective after the date of the enactment of this Act and on or before
January 1, 1983, such regulated public utility uses a normalization
method of accounting. This provision shall not apply to any rate order
which, under the rules in effect before the date of the enactment
of this Act, required a regulated public utility to use a method of
accounting with respect to the deduction allowable by section 167
which, under section 167(l), it was not permitted to use.”
INTERIM REGULATIONS WITH RESPECT TO NORMALIZATION;
AUTHORITY TO PRESCRIBE
Section 209(d)(4) of Pub.
L. 97-34, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095, provided that: “Until Congress acts further,
the Secretary of the Treasury or his delegate may prescribe such interim
regulations as may be necessary or appropriate to determine whether
the requirements of section 168(e)(3)(B)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) have been met with respect
to property placed in service after December 31, 1980.”
PRIOR PROVISIONS
A prior section 168, acts Aug. 16, 1954, ch. 746,
68A Stat. 52; Aug. 26, 1957, Pub. L. 85-165,
Sec. 4, 71 Stat. 414;
Sept. 2, 1958, Pub. L. 85-866,
title I, Sec. 9(a), (b), 72 Stat. 1608,
1609, which related to deductions with respect to amortization of
emergency facilities, was repealed by Pub.
L. 94-455, title XIX, Sec. 1951(b)(4)(A), Oct. 4, 1976, 90 Stat. 1837.
Section 1951(b)(4)(B) of Pub.
L. 94-455 provided that: “Notwithstanding the repeal
made by subparagraph (A) (repealing former section 168), if a certificate
was issued before January 1, 1960, with respect to an emergency facility
which is or has been placed in service before the date of the enactment
of this Act (Oct. 4, 1976), the provisions of (former) section 168
shall not, with respect to such facility, be considered repealed.
The benefit of deductions by reason of the preceding sentence shall
be allowed to estates and trusts in the same manner as in the case
of an individual. The allowable deduction shall be apportioned between
the income beneficiaries and the fiduciary in accordance with regulations
prescribed under section 642(f).”