Sec. 280F. Limitation On Depreciation For Luxury Automobiles; Limitation Where Certain Property Used For Personal Purposes

I.R.C. § 280F(a) Limitation On Amount Of Depreciation For Luxury Automobiles

I.R.C. § 280F(a)(1) Depreciation

I.R.C. § 280F(a)(1)(A) Limitation —

The amount of the depreciation deduction for any taxable year for any passenger automobile shall not exceed—

I.R.C. § 280F(a)(1)(A)(i) —

$10,000 for the 1st taxable year in the recovery period,

I.R.C. § 280F(a)(1)(A)(ii) —

$16,000 for the 2nd taxable year in the recovery period,

I.R.C. § 280F(a)(1)(A)(iii) —

$9,600 for the 3rd taxable year in the recovery period, and

I.R.C. § 280F(a)(1)(A)(iv) —

$5,760 for each succeeding taxable year in the recovery period.

I.R.C. § 280F(a)(1)(B) Disallowed Deductions Allowed For Years After Recovery Period

I.R.C. § 280F(a)(1)(B)(i) In General —

Except as provided in clause (ii), the unrecovered basis of any passenger automobile shall be treated as an expense for the 1st taxable year after the recovery period. Any excess of the unrecovered basis over the limitation of clause (ii) shall be treated as an expense in the succeeding taxable year.

I.R.C. § 280F(a)(1)(B)(ii) $5,760 Limitation —

The amount treated as an expense under clause (i) for any taxable year shall not exceed $5,760.

I.R.C. § 280F(a)(1)(B)(iii) Property Must Be Depreciable —

No amount shall be allowable as a deduction by reason of this subparagraph with respect to any property for any taxable year unless a depreciation deduction would be allowable with respect to such property for such taxable year.

I.R.C. § 280F(a)(1)(B)(iv) Amount Treated As Depreciation Deduction —

For purposes of this subtitle, any amount allowable as a deduction by reason of this subparagraph shall be treated as a depreciation deduction allowable under section 168.

I.R.C. § 280F(a)(2) Coordination With Reductions In Amount Allowable By Reason Of Personal Use, Etc. —

This subsection shall be applied before—

I.R.C. § 280F(a)(2)(A) —

the application of subsection (b), and

I.R.C. § 280F(a)(2)(B) —

the application of any other reduction in the amount of any depreciation deduction allowable under section 168 by reason of any use not qualifying the property for such credit or depreciation deduction.

I.R.C. § 280F(b) Limitation Where Business Use Of Listed Property Not Greater Than 50 Percent

I.R.C. § 280F(b)(1) Depreciation —

If any listed property is not predominantly used in a qualified business use for any taxable year, the deduction allowed under section 168 with respect to such property for such taxable year and any subsequent taxable year shall be determined under section 168(g) (relating to alternative depreciation system).

I.R.C. § 280F(b)(2) Recapture

I.R.C. § 280F(b)(2)(A) Where Business Use Percentage Does Not Exceed 50 Percent —

If—

I.R.C. § 280F(b)(2)(A)(i) —

property is predominantly used in a qualified business use in a taxable year in which it is placed in service, and

I.R.C. § 280F(b)(2)(A)(ii) —

such property is not predominantly used in a qualified business use for any subsequent taxable year, then any excess depreciation shall be included in gross income for the taxable year referred to in clause (ii), and the depreciation deduction for the taxable year referred to in clause (ii) and any subsequent taxable years shall be determined under section 168(g) (relating to alternative depreciation system).

I.R.C. § 280F(b)(2)(B) Excess Depreciation —

For purposes of subparagraph (A), the term “excess depreciation” means the excess (if any) of—

I.R.C. § 280F(b)(2)(B)(i) —

the amount of the depreciation deductions allowable with respect to the property for taxable years before the 1st taxable year in which the property was not predominantly used in a qualified business use, over

I.R.C. § 280F(b)(2)(B)(ii) —

the amount which would have been so allowable if the property had not been predominantly used in a qualified business use for the taxable year in which it was placed in service.

I.R.C. § 280F(b)(3) Property Predominantly Used In Qualified Business Use —

For purposes of this subsection, property shall be treated as predominantly used in a qualified business use for any taxable year if the business use percentage for such taxable year exceeds 50 percent.

I.R.C. § 280F(c) Treatment Of Leases

I.R.C. § 280F(c)(1) Lessor's Deductions Not Affected —

This section shall not apply to any listed property leased or held for leasing by any person regularly engaged in the business of leasing such property.

I.R.C. § 280F(c)(2) Lessee's Deductions Reduced —

For purposes of determining the amount allowable as a deduction under this chapter for rentals or other payments under a lease for a period of 30 days or more of listed property, only the allowable percentage of such payments shall be taken into account.

I.R.C. § 280F(c)(3) Allowable Percentage —

For purposes of paragraph (2), the allowable percentage shall be determined under tables prescribed by the Secretary. Such tables shall be prescribed so that the reduction in the deduction under paragraph (2) is substantially equivalent to the applicable restrictions contained in subsections (a) and (b).

I.R.C. § 280F(c)(4) Lease Term —

In determining the term of any lease for purposes of paragraph (2), the rules of section 168(i)(3)(A) shall apply.

I.R.C. § 280F(c)(5) Lessee Recapture —

Under regulations prescribed by the Secretary, rules similar to the rules of subsection (b)(3) shall apply to any lessee to which paragraph (2) applies.

I.R.C. § 280F(d) Definitions And Special Rules —

For purposes of this section—

I.R.C. § 280F(d)(1) Coordination With Section 179 —

Any deduction allowable under section 179 with respect to any listed property shall be subject to the limitations of subsections (a) and (b), and the limitation of paragraph (3) of this subsection, in the same manner as if it were a depreciation deduction allowable under section 168.

I.R.C. § 280F(d)(2) Subsequent Depreciation Deductions Reduced For Deductions Allocable To Personal Use —

Solely for purposes of determining the amount of the depreciation deduction for subsequent taxable years, if less than 100 percent of the use of any listed property during any taxable year is use in a trade or business (including the holding for the production of income), all of the use of such property during such taxable year shall be treated as use so described.

I.R.C. § 280F(d)(3) Deductions Of Employee

I.R.C. § 280F(d)(3)(A) In General —

Any employee use of listed property shall not be treated as use in a trade or business for purposes of determining the amount of any depreciation deduction allowable to the employee (or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property) unless such use is for the convenience of the employer and required as a condition of employment.

I.R.C. § 280F(d)(3)(B) Employee Use —

For purposes of subparagraph (A), the term “employee use” means any use in connection with the performance of services as an employee.

I.R.C. § 280F(d)(4) Listed Property

I.R.C. § 280F(d)(4)(A) In General —

Except as provided in subparagraph (B), the term “listed property” means—

I.R.C. § 280F(d)(4)(A)(i) —

any passenger automobile,

I.R.C. § 280F(d)(4)(A)(ii) —

any other property used as a means of transportation,

I.R.C. § 280F(d)(4)(A)(iii) —

any property of a type generally used for purposes of entertainment, recreation, or amusement, and

I.R.C. § 280F(d)(4)(A)(iv) —

any other property of a type specified by the Secretary by regulations.

I.R.C. § 280F(d)(4)(B) Exception For Property Used In Business Of Transporting Persons Or Property —

Except to the extent provided in regulations, clause (ii) of subparagraph (A) shall not apply to any property substantially all of the use of which is in a trade or business of providing to unrelated persons services consisting of the transportation of persons or property for compensation or hire.

I.R.C. § 280F(d)(5) Passenger Automobile

I.R.C. § 280F(d)(5)(A) In General —

Except as provided in subparagraph (B), the term “passenger automobile” means any 4-wheeled vehicle—

I.R.C. § 280F(d)(5)(A)(i) —

which is manufactured primarily for use on public streets, roads, and highways, and

I.R.C. § 280F(d)(5)(A)(ii) —

which is rated at 6,000 pounds unloaded gross vehicle weight or less.

In the case of a truck or van, clause (ii) shall be applied by substituting “gross vehicle weight” for “unloaded gross vehicle weight”.

I.R.C. § 280F(d)(5)(B) Exception For Certain Vehicles —

The term “passenger automobile” shall not include—

I.R.C. § 280F(d)(5)(B)(i) —

any ambulance, hearse, or combination ambulance-hearse used by the taxpayer directly in a trade or business,

I.R.C. § 280F(d)(5)(B)(ii) —

any vehicle used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire, and

I.R.C. § 280F(d)(5)(B)(iii) —

under regulations, any truck or van.

I.R.C. § 280F(d)(6) Business Use Percentage

I.R.C. § 280F(d)(6)(A) In General —

The term “business use percentage” means the percentage of the use of any listed property during any taxable year which is a qualified business use.

I.R.C. § 280F(d)(6)(B) Qualified Business Use —

Except as provided in subparagraph (C), the term “qualified business use” means any use in a trade or business of the taxpayer.

I.R.C. § 280F(d)(6)(C) Exception For Certain Use By 5-Percent Owners And Related Persons

I.R.C. § 280F(d)(6)(C)(i) In General —

The term “qualified business use” shall not include—

I.R.C. § 280F(d)(6)(C)(i)(I) —

leasing property to any 5-percent owner or related person,

I.R.C. § 280F(d)(6)(C)(i)(II) —

use of property provided as compensation for the performance of services by a 5-percent owner or related person, or

I.R.C. § 280F(d)(6)(C)(i)(III) —

use of property provided as compensation for the performance of services by any person not described in subclause (II) unless an amount is included in the gross income of such person with respect to such use, and, where required, there was withholding under chapter 24.

I.R.C. § 280F(d)(6)(C)(ii) Special Rule For Aircraft —

Clause (i) shall not apply with respect to any aircraft if at least 25 percent of the total use of the aircraft during the taxable year consists of qualified business use not described in clause (i).

I.R.C. § 280F(d)(6)(D) Definitions —

For purposes of this paragraph—

I.R.C. § 280F(d)(6)(D)(i) 5-Percent Owner —

The term “5-percent owner” means any person who is a 5-percent owner with respect to the taxpayer (as defined in section 416(i)(1)(B)(i)).

I.R.C. § 280F(d)(6)(D)(ii) Related Person —

The term “related person” means any person related to the taxpayer (within the meaning of section 267(b)).

I.R.C. § 280F(d)(7) Automobile Price Inflation Adjustment

I.R.C. § 280F(d)(7)(A) In General —

In the case of any passenger automobile placed in service after 2018, subsection (a) shall be applied by increasing each dollar amount contained in such subsection by the automobile price inflation adjustment for the calendar year in which such automobile is placed in service. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or if the increase is a multiple of $50, such increase shall be increased to the next higher multiple of $100).

I.R.C. § 280F(d)(7)(B) Automobile Price Inflation Adjustment —

For purposes of this paragraph—

I.R.C. § 280F(d)(7)(B)(i) In General —

The automobile price inflation adjustment for any calendar year is the percentage (if any) by which—

I.R.C. § 280F(d)(7)(B)(i)(I) —

the C-CPI-U automobile component for October of the preceding calendar year, exceeds

I.R.C. § 280F(d)(7)(B)(i)(II) —

the automobile component of the CPI (as defined in section 1(f)(4)) for October of 1987.

I.R.C. § 280F(d)(7)(B)(i) In General —

The automobile price inflation adjustment for any calendar year is the percentage (if any) by which—

I.R.C. § 280F(d)(7)(B)(i)(I) —

the C-CPI-U automobile component for October of the preceding calendar year, exceeds

I.R.C. § 280F(d)(7)(B)(i)(II) —

the automobile component of the CPI (as defined in section 1(f)(4)) for October of 2017,

multiplied by the amount determined under 1(f)(3)(B).

I.R.C. § 280F(d)(7)(B)(ii) C-CPI-U Automobile Component —

The term “C-CPI-U automobile component” means the automobile component of the Chained Consumer Price Index for All Urban Consumers (as described in section 1(f)(6)).

I.R.C. § 280F(d)(7)(B) Automobile Price Inflation Adjustment —

For purposes of this paragraph—

I.R.C. § 280F(d)(7)(B)(i) In General —

The automobile price inflation adjustment for any calendar year is the percentage (if any) by which—

I.R.C. § 280F(d)(7)(B)(i)(I) —

the C-CPI-U automobile component for October of the preceding calendar year, exceeds

I.R.C. § 280F(d)(7)(B)(i)(II) —

the automobile component of the CPI (as defined in section 1(f)(4)) for October of 1987, multiplied by the amount determined under 1(f)(3)(B).

I.R.C. § 280F(d)(7)(B)(ii) C-CPI-U Automobile Component —

The term “C-CPI-U automobile component” means the automobile component of the Chained Consumer Price Index for All Urban Consumers (as described in section 1(f)(6)).

I.R.C. § 280F(d)(7)(B) Automobile Price Inflation Adjustment —

For purposes of this paragraph—

I.R.C. § 280F(d)(7)(B)(i) In General —

The automobile price inflation adjustment for any calendar year is the percentage (if any) by which—

I.R.C. § 280F(d)(7)(B)(i)(I) —

the C-CPI-U automobile component for October of the preceding calendar year, exceeds

I.R.C. § 280F(d)(7)(B)(i)(II) —

the automobile component of the CPI (as defined in section 1(f)(4)) for October of 2017, multiplied by the amount determined under 1(f)(3)(B).

I.R.C. § 280F(d)(7)(B)(ii) C-CPI-U Automobile Component —

The term “C-CPI-U automobile component” means the automobile component of the Chained Consumer Price Index for All Urban Consumers (as described in section 1(f)(6)).

I.R.C. § 280F(d)(8) Unrecovered Basis —

For purposes of subsection (a)(1), the term “unrecovered basis” means the adjusted basis of the passenger automobile determined after the application of subsection (a) and as if all use during the recovery period were use in a trade or business (including the holding of property for the production of income).

I.R.C. § 280F(d)(9) All Taxpayers Holding Interests In Passenger Automobile Treated As 1 Taxpayer —

All taxpayers holding interests in any passenger automobile shall be treated as 1 taxpayer for purposes of applying subsection (a) to such automobile, and the limitations of subsection (a) shall be allocated among such taxpayers in proportion to their interests in such automobile.

I.R.C. § 280F(d)(10) Special Rule For Property Acquired In Nonrecognition Transactions —

For purposes of subsection (a)(1) any property acquired in a nonrecognition transaction shall be treated as a single property originally placed in service in the taxable year in which it was placed in service after being so acquired.

I.R.C. § 280F(e) Regulations —

The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations with respect to items properly included in, or excluded from, the adjusted basis of any listed property.

(Added by Pub. L. 98-369, div. A, title I, Sec. 179(a), July 18, 1984, 98 Stat. 713, and amended by Pub. L. 99-44, Sec. 4, May 24, 1985, 99 Stat. 78; Pub. L. 99-514, title II, Sec. 201(d)(4), title XVIII, Sec. 1812(e)(1)(A), (C), (2)-(5), Oct. 22, 1986, 100 Stat. 2139, 2836, 2837; Pub. L. 100-647, title I, Sec. 1002(a)(10), (b)(2), 1018(u)(3), Nov. 10, 1988, 102 Stat. 3354, 3357, 3590; Pub. L. 101-239, title VII, Sec. 7643(a), Dec. 19, 1989, 103 Stat. 2381; Pub. L. 101-508, title XI, Sec. 11813(b)(13)(A)-(E), Nov. 5, 1990, 104 Stat. 1388-554, 1388-555; Pub. L. 104-188, title I, Sec. 1702(h)(5), Aug. 20, 1996, 110 Stat. 1755; Pub. L. 105-34, title IX, Sec. 971(a), Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec. 6009(c), July 22, 1998, 112 Stat 685; Pub. L. 107-147, title VI, Sec. 602(b)(1), Mar. 9, 2002, 116 Stat. 21; Pub. L. 111-240, title II, Sec. 2043, Sept. 27, 2010, 124 Stat. 2504; Pub. L. 113-295, Div. A, title II, Sec. 220(j), 221(a)(34)(E), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, title I, Secs. 11002(d)(8), 13202, Dec. 22, 2017, 131 Stat. 2054.)

BACKGROUND NOTES

AMENDMENTS

2017 — Subsec. (a)(1)(A)(i). Pub. L. 115-97, Sec. 13202(a)(1)(A), amended clause (i) by substituting “$10,000” for “$2,560”.

Subsec. (a)(1)(A)(ii). Pub. L. 115-97, Sec. 13202(a)(1)(A), amended clause (ii) by substituting “$16,000” for “$4,100”.

Subsec. (a)(1)(A)(iii). Pub. L. 115-97, Sec. 13202(a)(1)(A), amended clause (iii) by substituting “$9,600” for “$2,450”.

Subsec. (a)(1)(A)(iv). Pub. L. 115-97, Sec. 13202(a)(1)(A), amended clause (iv) by substituting “$5,760” for “$1,475”.

Subsec. (a)(1)(B)(ii). Pub. L. 115-97, Sec. 13202(a)(2)(A), amended clause (ii) by substituting “$5,760” for “$1,475” in the text and heading.

Subsec. (d)(4)(A)(iii)-(v). Pub. L. 115-97, Sec. 13202(b)(1)(A), amended subpar. (A) by inserting “and” at the end of clause (iii); by striking clause (iv), and by redesignating clause (v) as clause (iv). Before being struck, clause (iv) read as follows:

“(iv) any computer or peripheral equipment (as defined in section 168(i)(2)(B)), and”.

Subsec. (d)(4)(B)-(C). Pub. L. 115-97, Sec. 13202(b)(2), amended par. (4) by striking subpar. (B) and by redesignating subpar. (C) as subpar. (B). Before being struck, subpar. (B) read as follows:

“(B) Exception For Certain Computers.—The term “listed property” shall not include any computer or peripheral equipment (as so defined) used exclusively at a regular business establishment and owned or leased by the person operating such establishment. For purposes of the preceding sentence, any portion of a dwelling unit shall be treated as a regular business establishment if (and only if) the requirements of section 280A(c)(1) are met with respect to such portion.”

Subsec. (d)(7)(A). Pub. L. 115-97, Sec. 13202(a)(2)(B)(i), amended subpar. (A) by substituting “2018” for “1988”.

Subsec. (d)(7)(B). Pub. L. 115-97, Sec. 11002(d)(8), amended subpar. (B). Before being amended, subpar. (B) read as follows:

“(B) Automobile Price Inflation Adjustment.—For purposes of this paragraph—

“(i) In General.—The automobile price inflation adjustment for any calendar year is the percentage (if any) by which—

“(I) the CPI automobile component for October of the preceding calendar year, exceeds

“(II) the CPI automobile component for October of 1987.

“(ii) CPI Automobile Component.—The term “CPI automobile component” means the automobile component of the Consumer Price Index for All Urban Consumers published by the Department of Labor.”

Subsec. (d)(7)(B)(i)(II). Pub. L. 115-97, Sec. 13202(a)(2)(B)(ii), amended subclause (II) by substituting “2017” for “1987”.

2014 — Subsec. (a)(1)(C). Pub. L. 113-295, Div. A, Sec. 221(a)(34)(E), amended par. (1) by striking subpar. (C). Before being struck, it read as follows:

“(C) Special Rule For Certain Clean-Fuel Passenger Automobiles.—

“(i) Modified Automobiles.—In the case of a passenger automobile which is propelled by a fuel which is not a clean-burning fuel and to which is installed qualified clean-fuel vehicle property (as defined in section 179A(c)(1)(A)) for purposes of permitting such vehicle to be propelled by a clean burning fuel (as defined in section 179A(e)(1)), subparagraph (A) shall not apply to the cost of the installed qualified clean burning vehicle property.

“(ii) Purpose Built Passenger Vehicles.—In the case of a purpose built passenger vehicle (as defined in section 4001(a)(2)(C)(ii)), each of the annual limitations specified in subparagraphs (A) and (B) shall be tripled.

“(iii) Application Of Subparagraph.—This subparagraph shall apply to property placed in service after August 5, 1997, and before January 1, 2007.”

Subsec. (d)(8). Pub. L. 113-295, Div. A, Sec. 220(j), amended par. (8) by substituting “subsection (a)(1)” for “subsection (a)(2)”.

Subsec. (d)(10). Pub. L. 113-295, Div. A, Sec. 220(j), amended par. (10) by substituting “subsection (a)(1)” for “subsection (a)(2)”.

2010 — Subsec. (d)(4)(A)(iv)-(vi). Pub. L. 111-240, Sec. 2043(a), amended subpar. (A) by inserting “and” at the end of clause (iv); by striking clause (v); and by redesignating clause (vi) as clause (v). Before being struck, clause (v) read as follows:

“(v) any cellular telephone (or other similar telecommunications equipment), and”.

2002 — Subsec. (a)(1)(C)(iii). Pub. L. 107-147, Sec. 602(b)(1), added clause (iii).

1998 — Subsec. (a)(1)(C). Pub. L. 105-206, Sec. 6009(c), amended clause (ii) by substituting “subparagraphs (A) and (B)” for “subparagraph (A)”.

1997 — Subsec. (a)(1)(C). Pub. L. 105-34, Sec. 971(a), added subpar. (C).

1996 — Subsec. (a). Pub. L. 104-188, Sec. 1702(h)(5), struck out ‘Investment Tax Credit And’ from the heading of subsection (a).

1990 — Pub. L. 101-508, Sec. 11813(b)(13)(E), struck out ‘investment tax credit and’ after ‘Limitation on’ in section catchline.

Subsec. (a)(1). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), redesignated par. (2) as (1) and struck out former par. (1) ‘Investment tax credit’ which read as follows: ‘The amount of the credit determined under section 46(a) for any passenger automobile shall not exceed $675.’

Subsec. (a)(2). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), redesignated par. (3) as (2). Former par. (2) redesignated (1).

Subsec. (a)(2)(B). Pub. L. 101-508, Sec. 11813(b)(13)(A)(ii), struck out ‘the credit determined under section 46(a) or’ after ‘the amount of’.

Subsec. (a)(3). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), redesignated par. (3) as (2).

Subsec. (a)(4). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), struck out par. (4) ‘Special rule where election of reduced credit in lieu of the basis adjustment’ which read as follows: ‘In the case of any election under section 48(q)(4) with respect to any passenger automobile, the limitation of paragraph (1) applicable to such passenger automobile shall be 2/3 of the amount which would be so applicable but for this paragraph.’

Subsec. (b). Pub. L. 101-508, Sec. 11813(b)(13)(B), redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) ‘Investment tax credit’ which read as follows: ‘For purposes of this subtitle, any listed property shall not be treated as section 38 property for any taxable year unless such property is predominantly used in a qualified business use for such taxable year.’

Subsec. (c)(1). Pub. L. 101-508, Sec. 11813(b)(13)(C), struck out ‘credits and’ after ‘Lessor's' in heading.

Subsec. (d)(3)(A). Pub. L. 101-508, Sec. 11813(b)(13)(D), struck out ‘the amount of any credit allowable under section 38 to the employee or’ after ‘of determining’.

1989 — Subsec. (d)(4)(A)(v), (vi). Pub. L. 101-239 added cl. (v) and redesignated former cl. (v) as (vi).

1988 — Subsec. (b)(3)(B)(i). Pub. L. 100-647, Sec. 1018(u)(3), substituted ‘depreciation deductions’ for ‘recovery deductions’.

Subsec. (d)(1). Pub. L. 100-647, Sec. 1002(b)(2), substituted ‘subsections (a) and (b), and the limitation of paragraph (3) of this subsection,’ for ‘subsections (a) and (b)’.

Subsec. (d)(3)(A). Pub. L. 100-647, Sec. 1002(a)(10), substituted ‘depreciation deduction’ for ‘recovery deduction’.

1986 — Subsec. (a)(2)(A). Pub. L. 99-514, Sec. 201(d)(4)(A)(i), (K), substituted ‘depreciation deduction’ for ‘recovery deduction’ in introductory provisions and substituted cls. (i) to (iv) for former cls. (i) and (ii) which read as follows:

‘(i) $3,200 for the first taxable year in the recovery period,

‘(ii) $4,800 for each succeeding taxable year in the recovery period.’

Subsec. (a)(2)(B). Pub. L. 99-514, Sec. 201(d)(4)(A)(ii), (K), substituted ‘$1,475’ for ‘$4,800’ in heading and text of cl. (ii), and ‘depreciation deduction’ for ‘recovery deduction’ in heading and text of cl. (iv).

Subsec. (a)(3)(B). Pub. L. 99-514, Sec. 201(d)(4)(K), substituted ‘depreciation deduction’ for ‘recovery deduction’ in two places.

Subsec. (b)(2). Pub. L. 99-514, Sec. 201(d)(4)(J), substituted ‘section 168(g) (relating to alternative depreciation system)’ for ‘the straight line method over the earnings and profits life for such property’.

Subsec. (b)(3)(A). Pub. L. 99-514, Sec. 201(d)(4)(B), (K), substituted ‘depreciation deduction’ for ‘recovery deduction’ and ‘section 168(g) (relating to alternative depreciation system)’ for ‘the straight line method over the earnings and profits life’ in closing provisions.

Subsec. (b)(4). Pub. L. 99-514, Sec. 201(d)(4)(C), in amending par. (4) generally, struck out heading ‘Definitions’, redesignated as par. (4) former subpar. (A) heading and text, substituted ‘For purposes of this section, property’ for ‘Property’, and struck out former subpar. (B) definition of straight line method over earnings and profits life.

Subsec. (c)(4). Pub. L. 99-514, Sec. 201(d)(4)(D), substituted ‘section 168(i)(3)(A)’ for ‘section 168(j)(6)(B)’.

Subsec. (d)(1). Pub. L. 99-514, Sec. 201(d)(4)(E), substituted ‘depreciation deduction’ for ‘recovery deduction’.

Subsec. (d)(2). Pub. L. 99-514, Sec. 1812(e)(5), substituted ‘is use described in’ for ‘is not use described in’.

Pub. L. 99-514, Sec. 201(d)(4)(F), substituted ‘depreciation deduction’ for ‘recovery deduction’ and ‘use in a trade or business (including the holding for the production of income)’ for ‘use described in section 168(c)(1) (defining recovery property)’.

Subsec. (d)(3)(A). Pub. L. 99-514, Sec. 1812(e)(2), inserted ‘(or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property)’.

Subsec. (d)(4)(A)(iv). Pub. L. 99-514, Sec. 201(d)(4)(G), substituted ‘section 168(i)(2)(B)’ for ‘section 168(j)(5)(D)’.

Subsec. (d)(4)(B). Pub. L. 99-514, Sec. 1812(e)(3), inserted ‘and owned or leased by the person operating such establishment’.

Subsec. (d)(4)(C). Pub. L. 99-514, Sec. 1812(e)(4), added subpar. (C).

Subsec. (d)(5)(A). Pub. L. 99-514, Sec. 1812(e)(1)(A), (C), substituted ‘unloaded gross vehicle weight’ for ‘gross vehicle weight’ in cl. (ii) and inserted at end ‘In the case of a truck or van, clause (ii) shall be applied by substituting ‘gross vehicle weight’ for ‘unloaded gross vehicle weight’.'

Subsec. (d)(8). Pub. L. 99-514, Sec. 201(d)(4)(H), amended par. (8) generally. Prior to amendment, par. (8) read as follows: ‘For purposes of subsection (a)(2), the term ‘unrecovered basis’ means the excess (if any) of -

‘(A) the unadjusted basis (as defined in section 168(d)(1)(A)) of the passenger automobile, over

‘(B) the amount of the recovery deductions which would have been allowable for taxable years in the recovery period determined after the application of subsection (a) and as if all use during the recovery period were use described in section 168(c)(1).’

Subsec. (d)(10). Pub. L. 99-514, Sec. 201(d)(4)(I), struck out ‘, notwithstanding any regulations prescribed under section 168(f)(7),’ after ‘For purposes of subsection (a)(2)’.

1985 - Subsec. (a)(1). Pub. L. 99-44, Sec. 4(a)(1), substituted ‘$675’ for ‘$1,000’.

Subsec. (a)(2)(A)(i). Pub. L. 99-44, Sec. 4(a)(2)(A), substituted ‘$3,200’ for ‘$4,000’.

Subsec. (a)(2)(A)(ii), (B)(ii). Pub. L. 99-44, Sec. 4(a)(2)(B), substituted ‘$4,800’ for ‘$6,000’ wherever appearing in text and heading.

Subsec. (d)(7)(A). Pub. L. 99-44, Sec. 4(b)(1), inserted ‘placed in service after 1988’ after ‘passenger automobile’.

Subsec. (d)(7)(B)(i). Pub. L. 99-44, Sec. 4(b)(3), struck out last sentence which directed that in the case of calendar year 1984, the automobile price inflation adjustment would be zero.

Subsec. (d)(7)(B)(i)(II). Pub. L. 99-44, Sec. 4(b)(2), substituted ‘1987’ for ‘1983’.

EFFECTIVE DATE OF 2017 AMENDMENTS

Amendment by Pub. L. 115-97, Sec. 11002(d)(8), effective for taxable years beginning after December 31, 2017.

Amendments by Pub. L. 115-97, Sec. 13202, effective for property placed in service after December 31, 2017, in taxable years ending after such date.

EFFECTIVE DATE OF 2014 AMENDMENTS

Amendments by Pub. L. 113-295, Div. A, Sec. 220(j), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].

Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(34)(E), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].

EFFECTIVE DATE OF 2010 AMENDMENTS

Amendments by Sec. 2043 of Pub. L. 111-240 effective for taxable years beginning after December 31, 2009.

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by Sec. 602(b)(1) of Pub. L. 107-147 applicable to property placed in service after December 31, 2001.

EFFECTIVE DATE OF 1998 AMENDMENTS

Amendment by Sec. 6009(c) of Pub. L. 105-206 applicable as if included in the amendments of the Taxpayer Relief Act of 1997 to which it relates [Effective Date of Pub. L. 105-34, Sec. 971: Property placed in service after August 5, 1997 and before January 1, 2005].

EFFECTIVE DATE OF 1997 AMENDMENTS

Amendment by Sec. 971(a) of Pub. L. 105-34, as amended by Pub. L. 107-147, Sec. 602(b)(2), applicable to property placed in service after the date of the enactment of this Act [Aug. 5, 1997].

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-188 effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1990 to which such amendment relates.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by 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 AMENDMENT

Section 7643(b) of Pub. L. 101-239 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to property placed in service or leased in taxable years beginning after December 31, 1989.’

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by 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.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by section 201(d)(4) of Pub. L. 99-514 applicable to property placed in service after Dec. 31, 1986, in taxable years ending after such date, with exceptions, see sections 203 and 204 of Pub. L. 99-514, set out as a note under section 168 of this title.

Amendment by section 201(d)(4) 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 section 1812(e)(1)(A), (C), (2)-(5) 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.

EFFECTIVE DATE OF 1985 AMENDMENT

Section 6(e) of Pub. L. 99-44 provided that:

‘(1) Except as provided in paragraph (2), the amendments made by section 4 (amending this section) shall apply to -

‘(A) property placed in service after April 2, 1985, in taxable years ending after such date, and

‘(B) property leased after April 2, 1985, in taxable years ending after such date.

‘(2) The amendments made by section 4 (amending this section) shall not apply to any property -

‘(A) acquired by the taxpayer pursuant to a binding contract in effect on April 1, 1985, and at all times thereafter, but only if the property is placed in service before August 1, 1985, or

‘(B) of which the taxpayer is the lessee, but only if the lease is pursuant to a binding contract in effect on April 1, 1985, and at all times thereafter, and only if the taxpayer first uses such property under the lease before August 1, 1985.’

EFFECTIVE DATE

Section 179(d) of Pub. L. 98-369 provided that:

‘(1) In general. -

‘(A) Except as provided in subparagraph (B), the amendments made by subsections (a) and (c) (enacting this section) shall apply to -

‘(i) property placed in service after June 18, 1984, in taxable years ending after such date, and

‘(ii) property leased after June 18, 1984, in taxable years ending after such date.

‘(B) The amendments made by subsections (a) and (c) shall not apply to any property -

‘(i) acquired by the taxpayer pursuant to a binding contract in effect on June 18, 1984, and at all times thereafter (or under construction on such date) but only if the property is placed in service before January 1, 1985 (January 1, 1987, in the case of 15-year real property), or

‘(ii) of which the taxpayer is the lessee but only if the lease is pursuant to a binding contract in effect on June 18, 1984, and at all times thereafter and only if the taxpayer first uses such property under the lease before January 1, 1985 (January 1, 1987, in the case of 15-year real property).

For purposes of the preceding sentence, the term ‘15-year real property’ includes 18-year real property.

‘(2) Compliance provisions. - The amendments made by subsection (b) (amending sections 274, 6653, and 6695 of this title) shall apply to taxable years beginning after December 31, 1984.’

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.

Sec. 280F. Limitation On Depreciation For Luxury Automobiles; Limitation Where Certain Property Used For Personal Purposes

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