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Internal Revenue Code, § 248. Organizational Expenditures

I.R.C. § 248(a) Election To Deduct
If a corporation elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenditures—
I.R.C. § 248(a)(1)
the corporation shall be allowed a deduction for the taxable year in which the corporation begins business in an amount equal to the lesser of—
I.R.C. § 248(a)(1)(A)
the amount of organizational expenditures with respect to the taxpayer, or
I.R.C. § 248(a)(1)(B)
$5,000, reduced (but not below zero) by the amount by which such organizational expenditures exceed $50,000, and
I.R.C. § 248(a)(2)
the remainder of such organizational expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the corporation begins business.
I.R.C. § 248(b) Organizational Expenditures Defined
The term “organizational expenditures” means any expenditure which—
I.R.C. § 248(b)(1)
is incident to the creation of the corporation;
I.R.C. § 248(b)(2)
is chargeable to capital account; and
I.R.C. § 248(b)(3)
is of a character which, if expended incident to the creation of a corporation having a limited life, would be amortizable over such life.
I.R.C. § 248(c) Time For And Scope Of Election
The election provided by subsection (a) may be made for any taxable year but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The period so elected shall be adhered to in computing the taxable income of the corporation for the taxable year for which the election is made and all subsequent taxable years.
(Aug. 16, 1954, ch. 736, 68A Stat. 76; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1901(a)(36), 1906(b)(13)(A), 90 Stat. 1770, 1834; Oct. 22, 2004, Pub. 108-357, title IX, 902(b), 118 Stat. 1418; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(42), Dec. 19, 2014.)
BACKGROUND NOTES
AMENDMENTS
2014 — Subsec. (c). Pub. L. 113-295, Div. A, Sec. 221(a)(42), amended subsec. (c) by striking “beginning after December 31, 1952,” and by striking the last sentence. Before being struck, the last sentence read as follows: “The election shall apply only with respect to expenditures paid or incurred on or after August 16, 1954.”
2004 -- Subsec. (a). Pub. L. 108-357, 902(b), amended subsec. (a). Prior to amendment it read as follows:
“(a) Election to amortize
“The organizational expenditures of a corporation may, at the election of the corporation (made in accordance with regulations prescribed by the Secretary[)], be treated as deferred expenses. In computing taxable income, such deferred expenses shall be allowed as a deduction ratably over such period of not less than 60 months as may be selected by the corporation (beginning with the month in which the corporation begins business).”
1976--Subsec. (a). Pub. L. 94-455, 1906(b)(13)(A), struck out “or his delegate" after “Secretary”.
Subsec. (c). Pub. L. 94-455, 1901(a)(36), substituted “August 16, 1954" for “the date of enactment of this title”.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a)(42), effective on the date of the enactment [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after 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.”
EFFECTIVE DATE OF 2004 AMENDMENT
Amendment by Section 902(b) of Pub. L. 108-357 applicable for amounts paid or incurred after the date of the enactment of this Act [Oct. 22, 2004].
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(a)(36) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
Amendment by section 1906(b)(13)(A) of Pub. L. 94-455 effective Feb. 1, 1977, see section 1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013 of this title.