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Internal Revenue Code, § 48. Energy Credit

I.R.C. § 48(a) Energy Credit
I.R.C. § 48(a)(1) In General
For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year.
I.R.C. § 48(a)(2) Energy Percentage
I.R.C. § 48(a)(2)(A) In General
Except as provided in paragraphs (6) and (7), the energy percentage is—
I.R.C. § 48(a)(2)(A)(i)
30 percent in the case of—
I.R.C. § 48(a)(2)(A)(i)(I)
qualified fuel cell property,
I.R.C. § 48(a)(2)(A)(i)(II)
energy property described in paragraph (3)(A)(i) but only with respect to property the construction of which begins before January 1, 2022,
I.R.C. § 48(a)(2)(A)(i)(III)
energy property described in paragraph (3)(A)(ii), and
I.R.C. § 48(a)(2)(A)(i)(IV)
qualified small wind energy property, and
I.R.C. § 48(a)(2)(A)(ii)
in the case of any energy property to which clause (i) does not apply, 10 percent.
I.R.C. § 48(a)(2)(B) Coordination With Rehabilitation Credit
The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures.
I.R.C. § 48(a)(3) Energy Property
For purposes of this subpart, the term “energy property” means any property—
I.R.C. § 48(a)(3)(A)
which is—
I.R.C. § 48(a)(3)(A)(i)
equipment which uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, excepting property used to generate energy for the purposes of heating a swimming pool,
I.R.C. § 48(a)(3)(A)(ii)
equipment which uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight but only with respect to property the construction of which begins before January 1, 2022,
I.R.C. § 48(a)(3)(A)(iii)
equipment used to produce, distribute, or use energy derived from a geothermal deposit (within the meaning of section 613(e)(2)), but only, in the case of electricity generated by geothermal power, up to (but not including) the electrical transmission stage,
I.R.C. § 48(a)(3)(A)(iv)
qualified fuel cell property or qualified microturbine property,
I.R.C. § 48(a)(3)(A)(v)
combined heat and power system property,
I.R.C. § 48(a)(3)(A)(vi)
qualified small wind energy property, or
I.R.C. § 48(a)(3)(A)(vii)
equipment which uses the ground or ground water as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure, but only with respect to property the construction of which begins before January 1, 2022,
I.R.C. § 48(a)(3)(B)
I.R.C. § 48(a)(3)(B)(i)
the construction, reconstruction, or erection of which is completed by the taxpayer, or
I.R.C. § 48(a)(3)(B)(ii)
which is acquired by the taxpayer if the original use of such property commences with the taxpayer,
I.R.C. § 48(a)(3)(C)
with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and
I.R.C. § 48(a)(3)(D)
which meets the performance and quality standards (if any) which—
I.R.C. § 48(a)(3)(D)(i)
have been prescribed by the Secretary by regulations (after consultation with the Secretary of Energy), and
I.R.C. § 48(a)(3)(D)(ii)
are in effect at the time of the acquisition of the property.
Such term shall not include any property which is part of a facility the production from which is allowed as a credit under section 45 for the taxable year or any prior taxable year.
I.R.C. § 48(a)(4) Special Rule For Property Financed By Subsidized Energy Financing Or Industrial Development Bonds
I.R.C. § 48(a)(4)(A) Reduction Of Basis
For purposes of applying the energy percentage to any property, if such property is financed in whole or in part by—
I.R.C. § 48(a)(4)(A)(i)
subsidized energy financing, or
I.R.C. § 48(a)(4)(A)(ii)
the proceeds of a private activity bond (within the meaning of section 141) the interest on which is exempt from tax under section 103, the amount taken into account as the basis of such property shall not exceed the amount which (but for this subparagraph) would be so taken into account multiplied by the fraction determined under subparagraph (B).
I.R.C. § 48(a)(4)(B) Determination Of Fraction
For purposes of subparagraph (A), the fraction determined under this subparagraph is 1 reduced by a fraction—
I.R.C. § 48(a)(4)(B)(i)
the numerator of which is that portion of the basis of the property which is allocable to such financing or proceeds, and
I.R.C. § 48(a)(4)(B)(ii)
the denominator of which is the basis of the property.
I.R.C. § 48(a)(4)(C) Subsidized Energy Financing
For purposes of subparagraph (A), the term “subsidized energy financing” means financing provided under a Federal, State, or local program a principal purpose of which is to provide subsidized financing for projects designed to conserve or produce energy.
I.R.C. § 48(a)(4)(D) Termination
This paragraph shall not apply to periods after December 31, 2008, under rules similar to the rules of section 48(m) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
I.R.C. § 48(a)(5) Election To Treat Qualified Facilities As Energy Property
I.R.C. § 48(a)(5)(A) In General
In the case of any qualified property which is part of a qualified investment credit facility—
I.R.C. § 48(a)(5)(A)(i)
such property shall be treated as energy property for purposes of this section, and
I.R.C. § 48(a)(5)(A)(ii)
the energy percentage with respect to such property shall be 30 percent.
I.R.C. § 48(a)(5)(B) Denial Of Production Credit
No credit shall be allowed under section 45 for any taxable year with respect to any qualified investment credit facility.
I.R.C. § 48(a)(5)(C) Qualified Investment Credit Facility
For purposes of this paragraph, the term “qualified investment credit facility” means any facility
I.R.C. § 48(a)(5)(C)(i)
which is a qualified facility (within the meaning of section 45) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d),
I.R.C. § 48(a)(5)(C)(ii)
which is placed in service after 2008 and the construction of which begins before January 1, 2018 (January 1, 2020, in the case of any facility which is described in paragraph (1) of section 45(d)), and
I.R.C. § 48(a)(5)(C)(iii)
with respect to which—
I.R.C. § 48(a)(5)(C)(iii)(I)
no credit has been allowed under section 45, and
I.R.C. § 48(a)(5)(C)(iii)(II)
the taxpayer makes an irrevocable election to have this paragraph apply.
I.R.C. § 48(a)(5)(D) Qualified Property
For purposes of this paragraph, the term “qualified property” means property—
I.R.C. § 48(a)(5)(D)(i)
which is—
I.R.C. § 48(a)(5)(D)(i)(I)
tangible personal property, or
I.R.C. § 48(a)(5)(D)(i)(II)
other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility,
I.R.C. § 48(a)(5)(D)(ii)
with respect to which depreciation (or amortization in lieu of depreciation) is allowable,
I.R.C. § 48(a)(5)(D)(iii)
which is constructed, reconstructed, erected, or acquired by the taxpayer, and
I.R.C. § 48(a)(5)(D)(iv)
the original use of which commences with the taxpayer.
I.R.C. § 48(a)(5)(E) Phaseout Of Credit For Wind Facilities
In the case of any facility using wind to produce electricity which is treated as energy property by reason of this paragraph, the amount of the credit determined under this section (determined after the application of paragraphs (1) and (2) and without regard to this subparagraph) shall be reduced by—
I.R.C. § 48(a)(5)(E)(i)
in the case of any facility the construction of which begins after December 31, 2016, and before January 1, 2018, 20 percent,
I.R.C. § 48(a)(5)(E)(ii)
in the case of any facility the construction of which begins after December 31, 2017, and before January 1, 2019, 40 percent, and
I.R.C. § 48(a)(5)(E)(iii)
in the case of any facility the construction of which begins after December 31, 2018, and before January 1, 2020, 60 percent.
I.R.C. § 48(a)(6) Phaseout For Solar Energy Property
I.R.C. § 48(a)(6)(A) In General
Subject to subparagraph (B), in the case of any energy property described in paragraph (3)(A)(i) the construction of which begins before January 1, 2022, the energy percentage determined under paragraph (2) shall be equal to—
I.R.C. § 48(a)(6)(A)(i)
in the case of any property the construction of which begins after December 31, 2019, and before January 1, 2021, 26 percent, and
I.R.C. § 48(a)(6)(A)(ii)
in the case of any property the construction of which begins after December 31, 2020, and before January 1, 2022, 22 percent.
I.R.C. § 48(a)(6)(B) Placed In Service Deadline
In the case of any energy property described in paragraph (3)(A)(i) the construction of which begins before January 1, 2022, and which is not placed in service before January 1, 2024, the energy percentage determined under paragraph (2) shall be equal to 10 percent.
I.R.C. § 48(a)(7) Phaseout For Fiber-Optic Solar, Qualified Fuel Cell, And Qualified Small Wind Energy Property
I.R.C. § 48(a)(7)(A) In General
Subject to subparagraph (B), in the case of any qualified fuel cell property, qualified small wind property, or energy property described in paragraph (3)(A)(ii), the energy percentage determined under paragraph (2) shall be equal to—
I.R.C. § 48(a)(7)(A)(i)
in the case of any property the construction of which begins after December 31, 2019, and before January 1, 2021, 26 percent, and
I.R.C. § 48(a)(7)(A)(ii)
in the case of any property the construction of which begins after December 31, 2020, and before January 1, 2022, 22 percent.
I.R.C. § 48(a)(7)(B) Placed In Service Deadline
In the case of any energy property described in subparagraph (A) which is not placed in service before January 1, 2024, the energy percentage determined under paragraph (2) shall be equal to 0 percent.
I.R.C. § 48(b) Certain Progress Expenditure Rules Made Applicable
Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).
I.R.C. § 48(c) Definitions
For purposes of this section—
I.R.C. § 48(c)(1) Qualified Fuel Cell Property
I.R.C. § 48(c)(1)(A) In General
The term “qualified fuel cell property” means a fuel cell power plant which—
I.R.C. § 48(c)(1)(A)(i)
has a nameplate capacity of at least 0.5 kilowatt of electricity using an electrochemical process, and
I.R.C. § 48(c)(1)(A)(ii)
has an electricity-only generation efficiency greater than 30 percent.
I.R.C. § 48(c)(1)(B) Limitation
In the case of qualified fuel cell property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $1,500 for each 0.5 kilowatt of capacity of such property.
I.R.C. § 48(c)(1)(C) Fuel Cell Power Plant
The term “fuel cell power plant” means an integrated system comprised of a fuel cell stack assembly and associated balance of plant components which converts a fuel into electricity using electrochemical means.
I.R.C. § 48(c)(1)(D) Termination
The term “qualified fuel cell property” shall not include any property the construction of which does not begin before January 1, 2022.
I.R.C. § 48(c)(2) Qualified Microturbine Property
I.R.C. § 48(c)(2)(A) In General
The term “qualified microturbine property” means a stationary microturbine power plant which—
I.R.C. § 48(c)(2)(A)(i)
has a nameplate capacity of less than 2,000 kilowatts, and
I.R.C. § 48(c)(2)(A)(ii)
has an electricity-only generation efficiency of not less than 26 percent at International Standard Organization conditions.
I.R.C. § 48(c)(2)(B) Limitation
In the case of qualified microturbine property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $200 for each kilowatt of capacity of such property.
I.R.C. § 48(c)(2)(C) Stationary Microturbine Power Plant
The term “stationary microturbine power plant” means an integrated system comprised of a gas turbine engine, a combustor, a recuperator or regenerator, a generator or alternator, and associated balance of plant components which converts a fuel into electricity and thermal energy. Such term also includes all secondary components located between the existing infrastructure for fuel delivery and the existing infrastructure for power distribution, including equipment and controls for meeting relevant power standards, such as voltage, frequency, and power factors.
I.R.C. § 48(c)(2)(D) Termination
The term “qualified microturbine property” shall not include any property the construction of which does not begin before January 1, 2022.
I.R.C. § 48(c)(3) Combined Heat And Power System Property
I.R.C. § 48(c)(3)(A) Combined Heat And Power System Property
The term “combined heat and power system property” means property comprising a system—
I.R.C. § 48(c)(3)(A)(i)
which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications),
I.R.C. § 48(c)(3)(A)(ii)
which produces—
I.R.C. § 48(c)(3)(A)(ii)(I)
at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and
I.R.C. § 48(c)(3)(A)(ii)(II)
at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof),
I.R.C. § 48(c)(3)(A)(iii)
the energy efficiency percentage of which exceeds 60 percent, and
I.R.C. § 48(c)(3)(A)(iv)
the construction of which begins before January 1, 2022.
I.R.C. § 48(c)(3)(B) Limitation
I.R.C. § 48(c)(3)(B)(i) In General
In the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property.
I.R.C. § 48(c)(3)(B)(ii) Applicable Capacity
For purposes of clause (i), the term “applicable capacity” means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.
I.R.C. § 48(c)(3)(B)(iii) Maximum Capacity
The term “combined heat and power system property” shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.
I.R.C. § 48(c)(3)(C) Special Rules
I.R.C. § 48(c)(3)(C)(i) Energy Efficiency Percentage
For purposes of this paragraph, the energy efficiency percentage of a system is the fraction—
I.R.C. § 48(c)(3)(C)(i)(I)
the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and
I.R.C. § 48(c)(3)(C)(i)(II)
the denominator of which is the lower heating value of the fuel sources for the system.
I.R.C. § 48(c)(3)(C)(ii) Determinations Made On Btu Basis
The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis.
I.R.C. § 48(c)(3)(C)(iii) Input And Output Property Not Included
The term “combined heat and power system property” does not include property used to transport the energy source to the facility or to distribute energy produced by the facility.
I.R.C. § 48(c)(3)(D) Systems Using Biomass
If a system is designed to use biomass (within the meaning of paragraphs (2) and (3) of section 45(c) without regard to the last sentence of paragraph (3)(A)) for at least 90 percent of the energy source—
I.R.C. § 48(c)(3)(D)(i)
subparagraph (A)(iii) shall not apply, but
I.R.C. § 48(c)(3)(D)(ii)
the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent.
I.R.C. § 48(c)(4) Qualified Small Wind Energy Property
I.R.C. § 48(c)(4)(A) In General
The term “qualified small wind energy property” means property which uses a qualifying small wind turbine to generate electricity.
I.R.C. § 48(c)(4)(B) Qualifying Small Wind Turbine
The term “qualifying small wind turbine” means a wind turbine which has a nameplate capacity of not more than 100 kilowatts.
I.R.C. § 48(c)(4)(C) Termination
The term “qualified small wind energy property” shall not include any property the construction of which does not begin before January 1, 2022.
I.R.C. § 48(d) Coordination With Department Of Treasury Grants
In the case of any property with respect to which the Secretary makes a grant under section 1603 of the American Recovery and Reinvestment Tax Act of 2009—
I.R.C. § 48(d)(1) Denial Of Production And Investment Credits
No credit shall be determined under this section or section 45 with respect to such property for the taxable year in which such grant is made or any subsequent taxable year.
I.R.C. § 48(d)(2) Recapture Of Credits For Progress Expenditures Made Before Grant
If a credit was determined under this section with respect to such property for any taxable year ending before such grant is made—
I.R.C. § 48(d)(2)(A)
the tax imposed under subtitle A on the taxpayer for the taxable year in which such grant is made shall be increased by so much of such credit as was allowed under section 38,
I.R.C. § 48(d)(2)(B)
the general business carryforwards under section 39 shall be adjusted so as to recapture the portion of such credit which was not so allowed, and
I.R.C. § 48(d)(2)(C)
the amount of such grant shall be determined without regard to any reduction in the basis of such property by reason of such credit.
I.R.C. § 48(d)(3) Treatment Of Grants
Any such grant—
I.R.C. § 48(d)(3)(A)
shall not be includible in the gross income or alternative minimum taxable income of the taxpayer, but
I.R.C. § 48(d)(3)(B)
shall be taken into account in determining the basis of the property to which such grant relates, except that the basis of such property shall be reduced under section 50(c) in the same manner as a credit allowed under subsection (a).
(Added by Pub. L. 87-834, Sec. 2(b), Oct. 16, 1962, 76 Stat. 967, and amended Pub. L. 88-272, title II, Sec. 203(a)(1), (3)(A), (b), (c), Feb. 26, 1964, 78 Stat. 33, 34; Pub. L. 89-800, Sec. 1 Nov. 8, 1966, 80 Stat. 1508; Pub. L. 89-809, title II, Sec. 201(a), Nov. 13, 1966, 80 Stat. 1575; Pub. L. 90-26, Sec. 1, 2(a), 3, June 13, 1967, 81 Stat. 57, 58; Pub. L. 91-172, title I, Sec. 121(d)(2)(A), title IV, Sec. 401(e)(2)-(4), Dec. 30, 1969, 83 Stat. 547, 603; Pub. L. 92-178, title I, Sec. 102(a)(2), 103, 104(a)(1), (b)-(f)(1), (g), 108(b), (c), Dec. 10, 1971, 85 Stat. 499-502, 507; Pub. L. 94-12, title III, Sec. 301(c)(1), 302(c)(3), title VI, Sec. 604(a), Mar. 29, 1975, 89 Stat. 38, 44, 65; Pub. L. 94-455, title VIII, Sec. 801, 802(b)(6), 804(a), title X, Sec. 1051(h)(1), title XIX, Sec. 1901(a)(5), (b)(11)(A), 1906(b)(13)(A), title XXI, Sec. 2112(a)(1), Oct. 4, 1976, 90 Stat. 1580, 1583, 1591, 1647, 1764, 1795, 1834, 1905; Pub. L. 95-473, Sec. 2(a)(2)(A), Oct. 17, 1978, 92 Stat. 1464; Pub. L. 95-600, title I, Sec. 141(b), (g)(1), title III, Sec. 311(b), 312(c)(1)-(3), (d), 314(a), (b), (c), 315(a)-(c), title VII, Sec. 703(a)(3), (4), Nov. 6, 1978, 92 Stat. 2791,2795, 2824, 2826-2829, 2939; Pub. L. 95-618, title III, Sec. 301(b), (d)(1), (2), Nov. 9, 1978, 92 Stat. 3195, 3199, 3200; Pub. L. 96-222, title I, Sec. 101(a)(7)(B), (a)(7)(G), (H), (L)(i)(I)-(IV), (ii)(III)-(VI), (iii)(II), (III), (v)(II)-(V), (M)(ii), (iii), 103(a)(2)(A), (4)(B), 108(c)(6), Apr. 1, 1980, 94 Stat. 197, 198-201, 208, 209, 228; Pub. L. 96-223, title II, Sec. 221(b), 222(a)-(e)(1), (f)-(i), 223(a)(1), (c)(1), (2), Apr. 2, 1980, 94 Stat. 261-266; 267; Pub. L. 96-451, title III, Sec. 302(a), Oct. 14, 1980, 94 Stat. 1991; Pub. L. 96-605, title I, Sec. 109(a), title II, Sec. 223(a), Dec. 28, 1980, 94 Stat. 3525, 3528; Pub. L. 97-34, title II, Sec. 211(a)(2), (c), (e)(3), (4), (h), 212(a)(3), (b), (c), (d)(2)(A), (e)(2), 213(a), 214(a), (b), title III, Sec. 332(b), Aug. 13, 1981, 95 Stat. 227-229, 235, 236, 239, 240, 296; Pub. L. 97-248, title II, Sec. 205(a)(1), (4), (5)(A), 209(c), Sept. 3, 1982, 96 Stat. 427, 429, 447; Pub. L. 97-354, Sec. 3(d), 5(a)(7), (8), Oct. 19, 1982, 96 Stat. 1689, 1692; Pub. L. 97-362, title I, Sec. 104(a), Oct. 25, 1982, 96 Stat. 1729; Pub. L. 97-424, title V, Sec. 546(a), Jan. 6, 1983, 96 Stat. 2198; Pub. L. 97-448, title I, Sec. 102(e)(2)(A), (f)(2), (3), (6), title II, Sec. 202(c), title III, Sec. 306(a)(3), Jan. 12, 1983, 96 Stat. 2371, 2372, 2396, 2400; Pub. L. 98-369, div. A, title I, Sec. 11, 31(b), (c), 111(e)(8), 113(a)(1), (b)(3), (4), 114(a), title IV, Sec. 431(c), 474(o)(10)-(18), title VII, Sec. 712(b), 721(x)(1), 735(c)(1), title X, Sec. 1043(a), July 18, 1984, 98 Stat. 503, 517, 518, 633, 635, 637, 638, 808, 836, 837, 946, 971, 981, 1044; Pub. L. 99-121, title I, Sec. 103(b)(5), Oct. 11, 1985, 99 Stat. 510; Pub. L. 99-514, title II, Sec. 251(b), (c), title VII, Sec. 701(e)(4)(C), title VIII, Sec. 803(b)(2)(B), title XII, Sec. 1272(d)(5), 1275(a)(5), (c)(5), title XV, Sec. 1511(c)(3), title XVIII, Sec. 1802(a)(4)(C), (5)(B), (9)(A), (B), 1809(d)(2), (e), 1847(b)(6), 1879(j)(1), Oct. 22, 1986, 100 Stat. 2184, 2186, 2343, 2355, 2594, 2599, 2745, 2788, 2789, 2821, 2856, 2908; Pub. L. 100-647, title I, Sec. 1002(a)(14), (16)(A), (20), (29), (30), 1013(a)(41), Nov. 10, 1988, 102 Stat. 3355-3357, 3544; Pub. L. 101-508, title XI, Sec. 11801(c)(6)(A), 11813(a), 11821, Nov. 5, 1990, 104 Stat. 1388-523, 1388-541; 1388-558; Pub. L. 102-227, title I, Sec. 106, Dec. 11, 1991, 105 Stat. 1686; Pub. L. 102-486, title XIX, Sec. 1916(a), Oct. 24, 1992, 106 Stat. 2776; Pub. L. 108-357, title III, VII, Sec. 322(d)(2), 710(e), Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-58, title XIII, Sec. 1336, 1337, Aug. 8, 2005, 119 Stat. 594; Pub. L. 109-135, title IV, Sec. 412(m), (n), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 109-432, div. A, title II, Sec. 207, Dec. 20, 2006, 120 Stat. 2922; Pub. L. 110-172, Sec. 11(a)(8), 11(a)(9), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110-343, div. B, title I, Sec. 103, 104, 105, Oct. 3, 2008, 122 Stat. 3765; Pub. L. 111-5, div. B, title I, Sec. 1102(a), 1103, 1104, Feb. 17, 2009, 123 Stat. 115; Pub. L. 112-240, title IV, Sec. 407, Jan. 2, 2013, 126 Stat. 2313; Pub. L. 113-295, Div. A, title I, Sec. 155(b), title II, Sec. 209(d), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-113, Div. P, title III, Sec. 302, 303, Div. Q, title I, Sec. 187(b), Dec. 18, 2015; Pub. L. 115-123, Div. D, title I, Sec. 40409(b), 40411, Feb. 9, 2018, 132 Stat. 64; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(20)-(23), Mar. 23, 2018.)
BACKGROUND NOTES
AMENDMENTS
2018 — Subsec. (a)(1). Pub. L. 115-141, Div. U, Sec. 401(a)(20), amended par. (1) by substituting ‘‘and (3)(B)’’ for ‘‘(3)(B), and (4)(B)’’.
Subsec. (a)(6)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(21), amended subpar. (B) by substituting ‘‘energy property’’ for ‘‘property energy property’’.
Subsec. (c)(2)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(22), amended subpar. (B) by substituting ‘‘equal to $200’’ for ‘‘equal $200’’.
Subsec. (d)(3). Pub. L. 115-141, Div. U, Sec. 401(a)(23), amended par. (3) by removing ‘‘shall’’ in the matter that precedes subpar. (A); inserting ‘‘shall’’ before ‘‘not’’ in subpar. (A).
Subsec. (a)(2)(A). Pub. L. 115-123, Sec. 40411(b)(2), amended subpar. (A) by substituting “paragraphs (6) and (7)” for “paragraph (6)”.
Subsec. (a)(3)(A)(ii). Pub. L. 115-123, Sec. 40411(a)(1), amended clause (ii) by substituting ‘‘property the construction of which begins before January 1, 2022’’ for “periods ending before January 1, 2017”.
Subsec. (a)(3)(A)(vii). Pub. L. 115-123, Sec. 40411(a)(2), amended clause (vii) by substituting ‘‘property the construction of which begins before January 1, 2022’’ for “periods ending before January 1, 2017”.
Subsec. (a)(5)(C)(ii). Pub. L. 115-123, Sec. 40409(b), amended clause (ii) by substituting “January 1, 2018” for “January 1, 2017”.
Subsec. (a)(5)(E). Pub. L. 115-123, Sec. 40411(b)(3), amended subpar. (E) by inserting ‘‘which is treated as energy property by reason of this paragraph’’ after ‘‘using wind to produce electricity’’.
Subsec. (a)(7). Pub. L. 115-123, Sec. 40411(b)(1), added par. (7).
Subsec. (c)(1)(D). Pub. L. 115-123, Sec. 40411(c), amended subpar. (D) by substituting “the construction of which does not begin before January 1, 2022” for “for any period after December 31, 2016”.
Subsec. (c)(2)(D). Pub. L. 115-123, Sec. 40411(d), amended subpar. (D) by substituting “the construction of which does not begin before January 1, 2022” for “for any period after December 31, 2016”.
Subsec. (c)(3)(A)(iv). Pub. L. 115-123, Sec. 40411(e), amended clause (iv) by substituting “the construction of which begins before January 1, 2022” for “which is placed in service before January 1, 2017”.
Subsec. (c)(4)(C). Pub. L. 115-123, Sec. 40411(f), amended subpar. (C) by substituting “the construction of which does not begin before January 1, 2022’’ for “for any period after December 31, 2016”.
2015 - Subsec. (a)(2)(A). Pub. L. 114-113, Div. P, Sec. 303(c), amended subpar. (A) by substituting “Except as provided in paragraph (6), the energy percentage” for “The energy percentage”.
Subsec. (a)(2)(A)(i)(II). Pub. L. 114-113, Div. P, Sec. 303(a), amended subclause (II) by substituting “property the construction of which begins before January 1, 2022” for “periods ending before January 1, 2017”.
Subsec. (a)(5)(C)(ii). Pub. L. 114-113, Div. P, Sec. 302(a), amended clause (ii) by inserting “(January 1, 2020, in the case of any facility which is described in paragraph (1) of section 45(d))” before “, and”.
Subsec. (a)(5)(C)(ii). Pub. L. 114-113, Div. Q, Sec. 187(b), amended clause (ii) by substituting “January 1, 2017” for “January 1, 2015”.
Subsec. (a)(5)(E). Pub. L. 114-113, Div. P, Sec. 302(b), amended par. (5) by adding subpar. (E).
Subsec. (a)(6). Pb. L. 114-113, Div. P, Sec. 303(b), added par. (6).
2014 - Subsec. (a)(5)(C)(ii). Pub. L. 113-295, Div. A, Sec. 155(b), amended clause (ii) by substituting “January 1, 2015” for “January 1, 2014”.
Subsec. (d)(3)(A). Pub. L. 113-295, Div. A, Sec. 209(d), amended subpar. (A) by inserting “or alternative minimum taxable income” after “includible in the gross income”.
2013 - Subsec. (a)(5)(C). Pub. L. 112-240, Sec. 407(b), amended subpar. (C). Before amendment, it read as follows:
“(C) Qualified Investment Credit Facility.—For purposes of this paragraph, the term “qualified investment credit facility” means any of the following facilities if no credit has been allowed under section 45 with respect to such facility and the taxpayer makes an irrevocable election to have this paragraph apply to such facility:
“(i) Wind Facilities.—Any qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) if such facility is placed in service in 2009, 2010, 2011, or 2012.
“(ii) Other Facilities.—Any qualified facility (within the meaning of section 45) described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d) if such facility is placed in service in 2009, 2010, 2011, 2012, or 2013.”
Subsec. (a)(5)(D). Pub. L. 112-240, Sec. 407(c), amended subpar. (D) by striking “and” at the end of clause (i)(II); by substituting a comma for the period at the end of clause (ii); and by adding clauses (iii) and (iv).
2009 — Subsec. (a)(4)(D). Pub. L. 111-5, Div. B, Sec. 1103(b)(1), amended par. (4) by adding subpar. (D).
Subsec. (a)(5). Pub. L. 111-5, Div. B, Sec. 1102(a), amended subsec. (a) by adding par. (5).
Subsec. (c)(4)(B)-(D). Pub. L. 111-5, Div. B, Sec. 1103(a), amended par. (4) 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) Limitation.—In the case of qualified small wind energy property placed in service during the taxable year, the credit otherwise determined under subsection (a)(1) for such year with respect to all such property of the taxpayer shall not exceed $4,000.”
Subsec. (d). Pub. L. 111-5, Div. B, Sec. 1104, added subsec. (d).
2008 - Subsec. (a)(1). Pub. L. 110-343, Div. B, Sec. 103(c)(3), amended par. (1) by substituting “paragraphs (1)(B), (2)(B), and (3)(B)” for “paragraphs (1)(B) and (2)(B)”.
Subsec. (a)(1). Pub. L. 110-343, Div. B, Sec. 104(d), amended par. (1) by substituting “paragraphs (1)(B), (2)(B), (3)(B), and (4)(B)” for “paragraphs (1)(B), (2)(B), and (3)(B)”.
Subsec. (a)(2)(A)(i)(II). Pub. L. 110-343, Div. B, Sec. 103(a)(1), amended subclause (II) by substituting “January 1, 2017” for “January 1, 2009”.
Subsec. (a)(2)(A)(i)(II). Pub. L. 110-343, Div. B, Sec. 104(b), amended subclause (II) by striking “and” at the end.
Subsec. (a)(2)(A)(i)(IV). Pub. L. 110-343, Div. B, Sec. 104(b), amended clause (i) by adding subclause (IV) at the end.
Subsec. (a)(3). Pub. L. 110-343, Div. B, Sec. 103(e)(1), amended par. (3) by striking the second sentence. Before being struck, it read as follows:
“ The term ‘energy property’ shall not include any property which is public utility property (as defined in section 46(f)(5) as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).”
Subsec. (a)(3)(A)(ii). Pub. L. 110-343, Div. B, Sec. 103(a)(1), amended clause (ii) by substituting ‘January 1, 2017” for “January 1, 2009”.
Subsec. (a)(3)(A)(iii)-(v). Pub. L. 110-343, Div. B, Sec. 103(c)(1), amended subpar. (A) by striking “or” at the end of clause (iii), by adding “or” at the end of clause (iv), and by adding clause (v).
Subsec. (a)(3)(A)(iv)-(vi). Pub. L. 110-343, Div. B, Sec. 104(a), amended subpar. (A) by striking “or” at the end of clause (iv), by inserting “or” at the end of clause (v), and by adding clause (vi).
Subsec. (a)(3)(A)(v)-(vii). Pub. L. 110-343, Div. B, Sec. 105(a), amended subpar. (A) by striking “or” at the end of clause (v), by inserting “or” at the end of clause (vi), and by adding clause (vii).
Subsec. (c). Pub. L. 110-343, Div. B, Sec. 103(c)(2)(A), amended the heading of subsec. (c) by substituting “Definitions” for “Qualified Fuel Cell Property; Qualified Microturbine Property”.
Subsec. (c)(1)(B). Pub. L. 110-343, Div. B, Sec. 103(d), amended subpar. (B) by substituting “$1,500” for “$500”.
Subsec. (c)(1)(D) Pub. L. 110-343, Div. B, Sec. 103(e)(2)(A), amended par. (1) by striking subpar. (D) and by redesignating subpar (E) as subpar. (D). Before amendment, it read as follows:
“(D) Special Rule.— The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to qualified fuel cell property which is used predominantly in the trade or business of the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services (other than international telegraph services).”
Subsec. (c)(1)(E). Pub. L. 110-343, Div. B, Sec. 103(a)(2), amended subpar. (E) by substituting “December 31, 2016” for “December 31, 2008”.
Subsec. (c)(1)(E). Pub. L. 110-343, Div. B, Sec. 103(e)(2)(A), amended par. (1) by redesignating subpar (E) as subpar. (D).
Subsec. (c)(2)(D). Pub. L. 110-343, Div. B, Sec. 103(e)(2)(B), amended par. (2) by striking subpar. (D). Before being struck, it read as follows:
“(D) Special Rule.— The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to qualified microturbine property which is used predominantly in the trade or business of the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services (other than international telegraph services).”
Subsec. (c)(2)(E). Pub. L. 110-343, Div. B, Sec. 103(a)(3), amended subpar. (E) by substituting “December 31, 2016” for “December 31, 2008”.
Subsec. (c)(2)(E). Pub. L. 110-343, Div. B, Sec. 103(e)(2)(B), amended par. (2) by redesignating subpar. (E) as subpar. (D).
Subsec. (c)(3). Pub. L. 110-343, Div. B, Sec. 103(c)(2)(B), amended subsec. (c) by adding par. (3).
Subsec. (c)(4). Pub. L. 110-343, Div. B, Sec. 104(c), amended subsec. (c) by adding par. (4).
2007 — Subsec. (c). Pub. L. 110-172, Sec. 11(a)(8), amended subsec. (c) by substituting “section” for “subsection” in the text preceding par. (1).
Subsec. (c)(1)(B). Pub. L. 110-172, Sec. 11(a)(9), amended subpar. (B) by substituting “subsection (a)” for “paragraph (1)”.
Subsec. (c)(2)(B). Pub. L. 110-172, Sec. 11(a)(9), amended subpar. (B) by substituting “subsection (a)” for “paragraph (1)”.
2006 — Subsec. (a)(2)(A). Pub. L. 109-432, Sec. 207(l), amended subpar. (A) by substituting “January 1, 2009” for “January 1, 2008”.
Subsec. (a)(3)(A). Pub. L. 109-432, Sec. 207(l), amended subpar. (A) by substituting “January 1, 2009” for “January 1, 2008”.
Subsec. (c)(1)(E). Pub. L. 109-432, Sec. 207(2), amended subpar. (E) by substituting “December 31, 2008” for “December 31, 2007”.
Subsec. (c)(2)(E). Pub. L. 109-432, Sec. 207(2), amended subpar. (E) by substituting “December 31, 2008” for “December 31, 2007”.
2005 — Subsec. (a)(1). Pub. L. 109-135, Sec. 412(m), amended par. (1) by substituting “paragraph (1)(B) or (2)(B) of subsection (c)” for “paragraph (1)(B) or (2)(B) of subsection (d)”.
Subsec. (a)(3)(A)(ii). Pub. L. 109-135, Sec. 412(n)(1), amended clause (ii) by striking “or” at the end.
Subsec. (a)(3)(A)(iii). Pub. L. 109-135, Sec. 412(n)(2), redesignated clause (iii) (relating to qualified fuel cell property) as clause (iv).
Subsec. (a)(1). Pub. L. 109-58, Sec. 1336(d), amended par. (1) by inserting “except as provided in paragraph (1)(B) or (2)(B) of subsection (d),” before “the energy”.
Subsec. (a)(2)(A). Pub. L. 109-58, Sec. 1336(c), amended subpar. (A). Before amendment it read as follows:
“(A) IN GENERAL.
“The energy percentage is 10 percent.”
Subsec. (a)(2)(A). Pub. L. 109-58, Sec. 1337(a), amended subpar. (A). Before amendment by Sec. 1337(a), subpar. (A) would have read as follows (The above amendment by Sec. 1336(c) has the same effective date as the amendment by Sec. 1337(a), and thus, appears to never have taken effect):
“(A) IN GENERAL.
“The energy percentage is-
“(i) in the case of qualified fuel cell property, 30 percent, and
“(ii) in the case of any other energy property, 10 percent.”
Subsec. (a)(3)(A)(i). Pub. L. 109-58, Sec. 1337(c), amended clause (i) by inserting “excepting property used to generate energy for the purposes of heating a swimming pool,” after “solar process heat,”.
Subsec. (a)(3)(A)(i)-(iii). Pub. L. 109-58, Sec. 1336(a), amended clause (i) by striking “or” at the end, amended clause (ii) by adding “or” at the end; and added clause (iii).
Subsec. (a)(3)(A)(i)-(iii). Pub. L. 109-58, Sec. 1337(b), amended clause (i) by striking “or” at the end; redesignated clause (ii) as clause (iii); and added clause (ii). Note that the amendments by Sec. 1336(a) and 1337(b) are conflicting.
Subsec. (c). Pub. L. 109-58, Sec. 1336(b), added subsec. (c).
2004 — Sec. 48. Pub. L. 108-357, Sec. 322(d)(2)(B), amended Sec. 48 by striking “; REFORESTATION CREDIT” in the heading.
Subsec. (a)(3). Pub. L. 108-357, Sec. 710(e), amended par. (3) by adding the sentence at the end.
Subsec. (a)(5). Pub. L. 108-357, Sec. 322(d)(2)(A), amended par. (5) by substituting “subsection (a)” for “this subsection" and redesignated par. (5) as subsec. (b).
Subsec. (b). Pub. L. 108-357, Sec. 322(d)(2)(A), struck subsec. (b). Before being struck, it read as follows:
“(b) REFORESTATION CREDIT.—
“(1) IN GENERAL.—For purposes of section 46, the reforestation credit for any taxable year is 10 percent of the portion of the amortizable basis of any qualified timber property which was acquired during such taxable year and which is taken into account under section 194 (after the application of section 194(b)(1)).
“(2) DEFINITIONS.— For purposes of this subpart, the terms ‘amortizable basis’ and ‘qualified timber property’ have the respective meanings given to such terms by section 194.”
1992 — Subsec. (a)(2)(A). Pub. L. 102-486, Sec. 1916(a) amended subparagraph (A) by substituting “Except as provided in subparagraph (b), the” with “The”.
Subsec. (a)(2)(B), (C). Pub. L. 102-485, Sec. 1916(a) struck subparagraph (B) and redesignated subparagraph (C) as subparagraph (B).
1991Pub. L. 102-227, Sec. 106, substituted “June 30, 1992” for “December 31, 1991”.
1990 — Subsec. (a)(8). Pub. L. 101-508, Sec. 11801(c)(6)(A), struck par. (8). Before being struck it read as follows:
“(8) Amortized Property.—Any property with respect to which an election under section 167(k), 184, or 188 applies shall not be treated as section 38 property.”
Pub. L. 101-508, Sec. 11813(a), amended Sec. 48. Before amendment, Sec. 48 read as follows:
“Section 48. Definitions; Special Rules.
“(a) Section 38 Property.—
“(1) In General.—Except as provided in this subsection, the term “section 38 property” means—
“(A) tangible personal property (other than an air conditioning or heating unit), or
“(B) other tangible property (not including a building and its structural components) but only if such property—
“(i) is used as an integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services, or
“(ii) constitutes a research facility used in connection with any of the activities referred to in clause (i), or
“(iii) constitutes a facility used in connection with any of the activities referred to in clause (i) for the bulk storage of fungible commodities (including commodities in a liquid or gaseous state); or
“(C) elevators and escalators, but only if—
“(i) the construction, reconstruction, or erection of the elevator or escalator is completed by the taxpayer after June 30, 1963, or
“(ii) the elevator or escalator is acquire after June 30, 1963, and the original use of such elevator or escalator commences with the taxpayer and commences after such date, or
“(D) single purpose agricultural or horticultural structures; or
“(E) in the case of a qualified rehabilitated building, that portion of the basis which is attributable to qualified rehabilitation expenditures (within the meaning of subsection (g)), or
“(F) in the case of qualified timber property (within the meaning of section 194(c)(1)), that portion of the basis of such property constituting the amortizable basis acquired during the taxable year (other than that portion of such amortizable basis attributable to property which otherwise qualifies as section 38 property) and taken into account under section 194 (after the application of section 194(b)(1)), or
“(G) a storage facility (not including a building and its structural components) used in connection with the distribution of petroleum or any primary product of petroleum.
“Such term includes only property to which section 168 applies without regard to any useful life and any other property with respect to which depreciation (or amortization in lieu of deprecation) is allowable and having a useful life (determined as of the time such property is placed in service) or 3 years or more. The preceding sentence shall not apply to property described in subparagraph (F) and, for purposes of this subpart, the useful life of such property shall be treated as its normal growing period.
“(2) Property Used Outside The United States.—
“(A) In General.—Except as provided in subparagraph (B), the term “section 38 property” does not include property which is used predominantly outside the United States.
“(B) Exceptions.—Subparagraph (A) shall not apply to—
“(i) 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;
“(ii) rolling stock which is used within and without the United States and which is—
“(I) of a domestic railroad corporation providing transportation subject to subchapter I of chapter 105 of title 49, or
“(II) of a United States person (other than a corporation described in subclause (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;
“(iii) any vessel documented under the laws of the United States which is operated in the foreign or domestic commerce of the United States;
“(iv) any motor vehicle of a United States person (as defined in section 7701(a)(30)) which is operated to an from the United States;
“(v) any container of a United States person which is used in the transportation of property to and from the United States;
“(vi) any property (other than a vessel or an aircraft) or 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;
“(vii) any property which is owned by a domestic corporation (other than a corporation which has an election in effect under section 936) 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.
“(viii) 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;
“(ix) any cable, or any interest therein, of a domestic corporation engaged in furnishing telephone service to which section 46(c)(3)(B)(iii) 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;
“(x) 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; and
“(xi) any property described in subsection (l)(3)(A)(ix) which is owned by a United States person and which is used international or territorial waters to generate energy for use in the United States.
“For purposes of clause (x), 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.
“(3) Property Used For Lodging.—Property which is used predominantly to furnish lodging or in connection with the furnishing of lodging shall not be treated as section 38 property. The preceding sentence shall not apply to—
“(A) nonlodging commercial facilities which are available to persons not suing the lodging facilities on the same basis as they are available to persons using the lodging facilities,
“(B) property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients,
“(C) coin-operated vending machines and coin-operated washing machines and dryers, and
“(D) a certified historic structure to the extend of that portion of the basis which is attributable to qualified rehabilitation expenditures.
“(45) Property Used By Certain Tax-Exempt Organizations.—Property used by an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter shall be treated as section 38 property only if such property is used predominantly in an unrelated trade or business the income of which his subject to tax under section 511. If the property is debt-financed property (as defined in section 514(b)), the basis or cost of such property for purposes of computing qualified investment property for purposes of computing qualified investment under section 46(c) shall include only that percentage of the basis or cost which is the same percentage as is used under section 514(a), for the year the property is placed in service, in computing the amount of gross income to be taken into account during such taxable year with respect to such property. If any qualified rehabilitated building is used by the tax-exempt organization pursuant to a lease, this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.
“(5) Property Used By Governmental Units Of Foreign Persons Or Entities.—
“(A) In General.—Property used—
“(i) by 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, or
“(ii) by any foreign person or entity (as defined in section 168(h)(2)(C)), but only with respect to property to which section 168(h)(2)(A)(iii) applies (determined after the application of section 168(h)(2)(B)),
“shall not be treated as section 38 property.
“(B) Exception For Short-Term Leases.—
“(i) In General.—This paragraph and paragraph (4) shall not apply to any property by reason of use under a lease with a term of less than 6 months (determined under section 168(i)(3)).
“(ii) Exception For Certain Oil Drilling Property And Certain Containers.—For purposes of this paragraph and paragraph (4), clause (i) shall be applied by substituting the lease term limitation in section 168(h)(1)(C)(ii) for the lease term limitation in clause (i) in the case of property which is leased to a foreign person or entity and —
“(I) which is used in offshore drilling for oil and gas (including drilling vessels, barges, platforms, and drilling equipment) and support vessels with respect to such property, or
“(II) which is a container described in section 48(a)(2)(B)(v) (without regard to whether such container is used outside the United States) or container chassis or trailer but only if such container, chassis, or trailer has a present class life of not more than 6 years.
“(C) Exception For Qualified Rehabilitated Buildings Leased To Governments, Etc.—If any qualified rehabilitated building is leased to a governmental unit (or a foreign person or entity), this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.
“(D) Special Rules For Partnerships, Etc.—For purposes of this paragraph and paragraph (4), rules similar to the rules of paragraphs (5) and (6) of section 168(h) shall apply.
“(E) Cross Reference.—For provision providing special rules for the application of this paragraph and paragraph (4), see section 168(h).
“(6) Livestock.—Livestock (other than horses) acquired by the taxpayer shall be treated as section 38 property, except that is substantially identical livestock is sold or otherwise disposed of by the taxpayer during the one-year period beginning 6 months before the date of such acquisition and if section 47(a) (relating to certain dispositions, etc. of section 38 property) does not apply to such sale or other disposition, then, unless such sale or other disposition constitutes an involuntary conversion (within the meaning of section 1033), the cost of the livestock acquired shall, for purpose of this subpart, be reduced by an amount equal to the amount realized on such sale or other disposition. Horses shall not be treated as section 38 property.
“(7) Property Completed Abroad Or Predominantly Of Foreign Origin.—
“(A) In General.—Property shall not be treated as section 38 property if—
“(i) such property was completed outside the United States, or
“(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.
“(B) Period Of Application Of Paragraph.—Except as provided in subparagraph (D), subparagraph (A) shall apply only with respect to property described in section 50 (as in effect before its repeal by the Revenue Act of 1978)—
“(i) the construction, reconstruction, or erection of which by the taxpayer is begun after August 15, 1971, and on or before the date of termination of Proclamation 4074, or
“(ii) which is acquired pursuant to an order placed on or before the date of termination of Proclamation 4074, unless acquired pursuant to an order which the taxpayer establishes was placed before August 16, 1971.
“(C) President May Exempt Articles.-If the President of the United States shall at any time determine that the application of subparagraph (A) to any article or class of articles is not in the public interest, he may be Executive order specify that subparagraph (A) shall not apply to such article or class of articles. Subparagraph (A) shall not apply to an article or class or articles for the period specified in such Executive order. Any period specified under the preceding sentence shall not apply to property ordered before (or to property the construction, reconstruction, or erection of which began before) the date of the Executive order specifying such period, except that, if the President determines it to be in the public interest, such period shall apply to property ordered (or property the construction, reconstruction, or erection of which began) after a date (before the date of the Executive order) specified in the Executive order.
“(D) Countries Maintaining Trade Restrictions Or Engaging In Discriminatory Acts.—If, on or after the date of the termination of Proclamation 4074, the President determines that a foreign country—
“(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
“(ii) engages in discriminatory or other acts (including tolerance of international cartels) or policies unjustifiably restricting United States commerce,
“he may provide by Executive order for the application of subparagraph (A) to any article or class of articles manufactured or produced in such foreign country for such period as may be provided by Executive order.
“(8)
“(9) [Repealed.]
“(10) Boilers Fueled By Oil or Gas.—
“(A) In General.—The term “section 38 property” does not include any boiler primarily fueled by petroleum or petroleum products (including natural gas) unless the use of coal is precluded by Federal air pollution regulations (or by State air pollution regulations in effect on October 1, 1978) or unless the use of such boiler will be an exempt use within the meaning of subparagraph (B). For purposes of the preceding sentence, the term “petroleum or petroleum products” does not include petroleum coke or petroleum pitch.
“(B) Exempt Use Defined.—For purpose of subparagraph (A), the term “exempt use” means—
“(i) use is an apartment, hotel, motel, or other residential facility,
“(ii) use in a vehicle, aircraft, or vessel, or in transportation by pipeline,
“(iii) use on a farm for farming purpose (within the meaning of section 6420(c)),
“(iv) use in—
“(I) a shopping center,
“(II) an office building,
“(III) a wholesale or retail establishment,
“(IV) any other facility which is not an integral part of manufacturing, processing, or mining, or
“(V) any facility for the production of electric power having a heat rate of less than 9,500 Btu's per kilowatt hour and which is capable of converting to synthetic fuels (as certified by the Secretary),
“(v) use in the exploration for, or the development, extraction, transmission, or storage of, crude oil, natural gas, or natural gas liquids, and
“(vi) use in Hawaii.
“Except as provided in clauses (iv)(V) and (vi) of the preceding sentence, the term “exempt use” does not include use of a boiler which is public utility property (within the meaning of section 46(f)(5)).”
1988 - Subsec. (a)(1). Pub. L. 100-647, Sec. 1002(a)(29), which directed amendment of par. (1) by substituting ‘property to which section 168 applies’ for ‘recovery property (within the meaning of section 168)’ in penultimate sentence, was executed by making the substitution for ‘recovery property (within the meaning of section 168’, which results in retaining remaining parenthetical material and closing parenthesis.
Subsec. (a)(5)(A)(ii). Pub. L. 100-647, Sec. 1002(a)(14)(A)-(C), substituted ‘168(h)(2)(C)’ for ‘168(j)(4)(C)’, ‘168(h)(2)(A)(iii)’ for ‘168(j)(4)(A)(iii)’, and ‘168(h)(2)(B)’ for ‘168(j)(4)(B)’.
Subsec. (a)(5)(B)(i). Pub. L. 100-647, Sec. 1002(a)(14)(D), substituted ‘168(i)(3)’ for ‘168(j)(6)’.
Subsec. (a)(5)(B)(ii). Pub. L. 100-647, Sec. 1002(a)(14)(E), substituted ‘168(h)(1)(C)(ii)’ for ‘168(j)(3)(C)(ii)’.
Subsec. (a)(5)(D). Pub. L. 100-647, Sec. 1002(a)(14)(F), substituted ‘paragraphs (5) and (6) of section 168(h)’ for ‘paragraphs (8) and (9) of section 168(j)’.
Subsec. (a)(5)(E). Pub. L. 100-647, Sec. 1002(a)(14)(G), amended subpar. (E) generally, substituting ‘provision’ for ‘provisions’ and ‘168(h)’ for ‘168(j)’.
Subsec. (l)(2)(C). Pub. L. 100-647, Sec. 1002(a)(30), substituted ‘to which section 168 applies’ for ‘which is recovery property (within the meaning of section 168)’.
Subsec. (l)(11)(A)(ii). Pub. L. 100-647, Sec. 1013(a)(41), substituted ‘a private activity bond (within the meaning of section 141)’ for ‘an industrial development bond (within the meaning of section 103(b)(2))’.
Subsec. (s). Pub. L. 100-647, Sec. 1002(a)(20), redesignated subsec. (s), relating to cross reference, as (t).
Subsec. (s)(9). Pub. L. 100-647, Sec. 1002(a)(16)(A), added par. (9).
Subsec. (t). Pub. L. 100-647, Sec. 1002(a)(20), redesignated subsec. (s), relating to cross reference, as (t).
1986 — Subsec. (a)(2)(B)(vii). Pub. L. 99-514, Sec. 1272(d)(5), 1275(c)(5), struck out ‘932,’ after ‘931,’ and ‘or which is entitled to the benefits of section 934(b)’ after ‘in effect under section 936’, and substituted ‘or 933’ for ‘, 933, or 934(c)’.
Subsec. (a)(4). Pub. L. 99-514, Sec. 1802(a)(9)(A), substituted ‘514(b)’ for ‘514(c)’ and ‘514(a)’ for ‘514(b)’.
Subsec. (a)(5)(B)(iii). Pub. L. 99-514, Sec. 1802(a)(5)(B), struck out cl. (iii) which provided that (I) in the case of any aircraft used under a qualifying lease (as defined in section 47(a)(7)(C)) and which is leased to a foreign person or entity before January 1, 1990, clause (i) shall be applied by substituting ‘3 years’ for ‘6 months’ and that (II) for purposes of applying section 47(a)(1) and (5)(B) there shall not be taken into account any period of a lease to which subclause (I) applies.
Subsec. (a)(5)(D), (E). Pub. L. 99-514, Sec. 1802(a)(4)(C), added subpar. (D) and redesignated former subpar. (D) as (E).
Subsec. (b)(1). Pub. L. 99-514, Sec. 1809(e)(1), inserted ‘Such term includes any section 38 property the reconstruction of which is completed by the taxpayer, but only with respect to that portion of the basis which is properly attributable to such reconstruction.’
Subsec. (b)(2). Pub. L. 99-514, Sec. 1809(e)(2), in introductory provisions substituted ‘the first sentence of paragraph (1)’ for ‘paragraph (1)’, in subpar. (B) substituted ‘3 months after’ for ‘3 months of’, in closing provisions substituted ‘used under the leaseback (or lease) referred to in subparagraph (B)’ for ‘used under the lease’ and inserted ‘The preceding sentence shall not apply to any property if the lessee and lessor of such property make an election under this sentence. Such an election, once made, may be revoked only with the consent of the Secretary.’
Subsec. (d)(4)(D). Pub. L. 99-514, Sec. 701(e)(4)(C), inserted ‘(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)’.
Subsec. (d)(6)(C)(ii). Pub. L. 99-514, Sec. 1511(c)(3), substituted ‘the underpayment rate’ for ‘the rate’ in closing provisions.
Subsec. (g)(1). Pub. L. 99-514, Sec. 251(b), amended par. (1) generally, restating in subpars. (A) to (D) provisions relating to qualified rehabilitated buildings which had in subpar. (A) provided general definition of qualified rehabilitated building, in subpar. (B) directed that 30 years must have elapsed since construction, in subpar. (C) provided general definition of substantially rehabilitated with special rule for phased rehabilitation and application of provision to lessees, and in subpar. (D) provided that rehabilitation included reconstruction, and striking out former subpar. (E) which had provided an alternative test for definition of qualified rehabilitated building.
Subsec. (g)(2). Pub. L. 99-514, Sec. 251(b), amended par. (2) generally, in subpar. (A) striking out reference to amounts ‘incurred after December 31, 1981’ in introductory provision, and in cl. (i) substituting subcls. (I) to (IV) for ‘for real property (or additions or improvements to real property) which have a recovery period (within the meaning of section 168) of 19 (15 years in the case of low-income housing) years,’, in subpar. (B), in cl. (i), substituting provision relating to use of straight line depreciation for provision relating to use of accelerated methods of depreciation, redesignating former cl. (vi) as (v) and substituting ‘section 168(h)’ for ‘section 168(j)’, redesignating former cl. (v) as (vi) and substituting ‘less than the recovery period determined under section 168(c)’ for ‘less than 19 years (15 years in the case of low-income housing’, restating subpar. (C) without change, and in subpar. (D) substituting provisions defining nonresidential real property, residential rental property and class life for provisions defining low-income housing.
Subsec. (g)(2)(B)(vi)(I). Pub. L. 99-514, Sec. 1802(a)(9)(B), substituted ‘section 168(j)’ for ‘section 168(j)(3)’.
Subsec. (g)(3). Pub. L. 99-514, Sec. 251(b), in amending par. (3) generally, inserted introductory phrase ‘For purposes of this subsection - ‘.
Subsec. (g)(4). Pub. L. 99-514, Sec. 251(b), in amending subsec. (g) generally, reenacted par. (4) without change.
Subsec. (l)(5). Pub. L. 99-514, Sec. 1847(b)(6), substituted ‘section 23(c)’ for ‘section 44C(c)’ and ‘section 23(c)(4)(A)(viii)’ for ‘section 44C(c)(4)(A)(viii)’.
Subsec. (q)(3). Pub. L. 99-514, Sec. 251(c), struck out ‘other than a certified historic structure’ after ‘qualified rehabilitated building’.
Subsec. (q)(7). Pub. L. 99-514, Sec. 1809(d)(2), renumbered par. (6), relating to special rule for qualified films, as (7).
Subsec. (r). Pub. L. 99-514, Sec. 1879(j)(1), added subsec. (r). Former subsec. (r) redesignated (s).
Subsec. (s). Pub. L. 99-514, Sec. 1879(j)(1), redesignated former subsec. (r) as (s).
Subsec. (s)(5). Pub. L. 99-514, Sec. 803(b)(2)(B), which directed the general amendment of par. (5) of subsec. (r), was executed by amending par. (5) of subsec. (s) to reflect the probable intent of Congress and the intervening redesignation of subsec. (r) as (s) by Pub. L. 99-514, Sec. 1879(j)(1), see note above. Prior to amendment, par. (5) read as follows: ‘For purposes of this subsection, the term ‘sound recording’ means any sound recording described in section 280(c)(2).'
1985 — Subsec. (g)(2)(A)(i), (B)(v). Pub. L. 99-121, Sec. 103(b)(5), substituted ‘19’ for ‘18’.
1984 — Subsec. (a)(5). Pub. L. 98-369, Sec. 31(b), amended par. (5) generally, to extend its scope to encompass property used by foreign persons or entities and to create an exception for short-term leases by substituting provisions covered by subpars. (A) to (D) for former provisions which had directed that property used by the United States, any State or political subdivision thereof, any international organization, or any agency or instrumentality of any of the foregoing not be treated as section 38 property, that for purposes of that prohibition the International Telecommunications Satellite Consortium, the International Maritime Satellite Organization, and any successor organization of such Consortium or Organization not be treated as an international organization, and that if any qualified rehabilitated building were used by the governmental unit pursuant to a lease, this paragraph would not apply to that portion of the basis of such building attributable to qualified rehabilitation expenditures.
Subsec. (b). Pub. L. 98-369, Sec. 114(a), amended subsec. (b) generally, substituting a general definition of ‘new section 38 property’ for definitions which made reference to property constructed, reconstructed or erected after December 31, 1961, and adding pars. (2) and (3).
Subsec. (c)(2)(A). Pub. L. 98-369, Sec. 11(a), substituted ‘$125,000 ($150,000 for taxable years beginning after 1987)’ for ‘$150,000 ($125,000 for taxable years beginning in 1981, 1982, 1983, or 1984)’ in first sentence, and ‘$125,000 (or $150,000’ for ‘$150,000 (or $125,000’ in two places in second sentence.
Subsec. (c)(2)(B). Pub. L. 98-369, Sec. 11(b), substituted ‘$62,500 ($75,000 for taxable years beginning after 1987)’ for ‘$75,000 ($62,500 for taxable years beginning in 1981, 1982, 1983, or 1984)’.
Subsec. (c)(3)(B). Pub. L. 98-369, Sec. 474(o)(10), substituted ‘section 39’ for ‘section 46(b)’.
Subsec. (d)(1)(B). Pub. L. 98-369, Sec. 474(o)(11), substituted ‘section 38(c)(3)(B)’ for ‘section 46(a)(6)’.
Subsec. (d)(6). Pub. L. 98-369, Sec. 431(c), added par. (6).
Subsec. (f)(3). Pub. L. 98-369, Sec. 474(o)(12), struck out par. (3) which provided that the $25,000 amount specified under subparagraphs (A) and (B) of section 46(a)(3) applicable to an estate or trust be reduced to an amount which bore the same ratio to $25,000 as the amount of the qualified investment allocated to the estate or trust under paragraph (1) to the entire amount of the qualified investment.
Subsec. (g)(1)(E). Pub. L. 98-369, Sec. 1043(a), added subpar. (E).
Subsec. (g)(2)(A)(i). Pub. L. 98-369, Sec. 111(e)(8)(A), (B), substituted ‘real property’ for ‘property’ in two places, and ‘18 (15 years in the case of low-income housing)’ for ‘15’.
Subsec. (g)(2)(B)(i). Pub. L. 98-369, Sec. 31(c)(2), inserted ‘The preceding sentence shall not apply to any expenditure to the extent subsection (f)(12) or (j) of section 168 applies to such expenditure.’
Subsec. (g)(2)(B)(v). Pub. L. 98-369, Sec. 111(e)(8)(C), substituted ‘18 years (15 years in the case of low-income housing)’ for ‘15 years’.
Subsec. (g)(2)(B)(vi). Pub. L. 98-369, Sec. 31(c)(1), added cl. (vi).
Subsec. (g)(2)(D). Pub. L. 98-369, Sec. 111(e)(8)(D), added subpar. (D).
Subsec. (k)(4). Pub. L. 98-369, Sec. 113(b)(3)(B), inserted ‘or at-risk rules’ after ‘test’ in heading.
Subsec. (k)(4)(A). Pub. L. 98-369, Sec. 113(b)(3)(A), inserted ‘, section 46(c)(8), or section 46(c)(9)’.
Subsec. (k)(4)(B). Pub. L. 98-369, Sec. 113(b)(3)(C), substituted ‘used’ for ‘issued’.
Subsec. (k)(5)(D)(i). Pub. L. 98-369, Sec. 721(x)(1), substituted ‘S corporation’ for ‘electing small business corporation’.
Subsec. (l)(1). Pub. L. 98-369, Sec. 474(o)(13), substituted ‘section 46(b)(2)’ for ‘section 46(a)(2)(C)’.
Subsec. (l)(16)(B)(i). Pub. L. 98-369, Sec. 735(c)(1), substituted ‘the chassis of which is an automobile bus chassis and the body of which is an automobile bus body’ for ‘the chassis and body of which is exempt under section 4063(a)(6) from the tax imposed by section 4061(a)’.
Subsec. (m). Pub. L. 98-369, Sec. 474(o)(14), substituted ‘subsection (b)’ for ‘subsection (a)(2)’.
Subsec. (n). Pub. L. 98-369, Sec. 474(o)(15), repealed subsec. (n). For continuing applicability of par. (4) of subsec. (n), see section 474(o)(15) of Pub. L. 98-369, set out in Effective Date of 1984 Amendment note below.
Subsec. (o)(3) to (8). Pub. L. 98-369, Sec. 474(o)(16), redesignated par. (8) as (3) and struck out former pars. (3) to (7) which defined ‘employee plan credit’, ‘basic employee plan credit’, ‘matching employee plan credit’, ‘basic employee plan percentage’, and ‘matching employee plan percentage’, respectively.
Subsec. (q)(1), (3). Pub. L. 98-369, Sec. 474(o)(17)(A), substituted ‘section 46(a)’ for ‘section 46(a)(2)’.
Subsec. (q)(4)(A)(i). Pub. L. 98-369, Sec. 474(o)(17), substituted ‘section 46(a)’ for ‘section 46(a)(2)’ and ‘section 46(b)(1)’ for ‘section 46(a)(2)(B)’.
Subsec. (q)(4)(B)(ii). Pub. L. 98-369, Sec. 474(o)(17)(B), substituted ‘section 46(b)(1)’ for ‘section 46(a)(2)(B)’.
Subsec. (q)(6). Pub. L. 98-369, Sec. 712(b), added par. (6) relating to adjustment in basis of interest in partnership or S corporation.
Pub. L. 98-369, Sec. 113(b)(4), added par. (6) relating to special rule for qualified films.
Subsec. (r). Pub. L. 98-369, Sec. 113(a)(1), added subsec. (r). Former subsec. (r) redesignated (s).
Pub. L. 98-369, Sec. 474(o)(18), substituted ‘section 381(c)(26)’ for ‘section 381(c)(23)’.
Subsec. (s). Pub. L. 98-369, Sec. 113(a)(1), redesignated former subsec. (r) as (s).
Pub. L. 98-369, Sec. 113(a)(1), redesignated (r) as (s) and inserted after (q) new subsection (r).
1983 — Subsec. (a)(1)(G). Pub. L. 97-448, Sec. 102(e)(2)(A), inserted ‘(not including a building and its structural components) used in connection’ after ‘storage facility’.
Subsec. (a)(10). Pub. L. 97-448, Sec. 202(c), amended directory language of Pub. L. 96-223, Sec. 223(a)(1), to correct an error, and did not involve any change in text. See 1980 Amendment note below.
Subsec. (g)(1)(C)(i). Pub. L. 97-448, Sec. 102(f)(2), (6), substituted ‘the 24-month period selected by the taxpayer (at the time and in the manner prescribed by regulation) and ending with or within the taxable year’ for ‘the 24-month period ending on the last day of the taxable year’ in provisions preceding subcl. (I), substituted ‘adjusted basis of such building (and its structural components)’ for ‘adjusted basis of such property’ both in subcl. (I) and in provision following subcl. (II), and, in provisions following subcl. (II), substituted ‘holding period of the building’ for ‘holding period of the property’ and inserted provision that, for purposes of the preceding sentence, the determination of the beginning of the holding period shall be made without regard to any reconstruction by the taxpayer in connection with the rehabilitation.
Subsec. (g)(5)(A). Pub. L. 97-448, Sec. 102(f)(3), substituted ‘a credit is determined under section 46(a)(2)’ for ‘a credit is allowed under this section’ and ‘the credit so determined’ for ‘the credit so allowed’. See 1982 Amendment note for subsec. (g)(5) below and see Effective Date of 1982 and 1983 Amendment notes set out under sections 1 and 196 of this title.
Subsec. (l)(5). Pub. L. 97-424, Sec. 546(a)(3), substituted reference to subpar. (N) for reference to subpar. (M) in provision following subparagraphs.
Subsec. (l)(5)(M), (N). Pub. L. 97-424, Sec. 546(a)(1), (2), added subpar. (M) and redesignated former subpar. (M) as (N).
Subsec. (q)(3). Pub. L. 97-448, Sec. 306(a)(3), substituted ‘paragraphs (1) and (2) of this subsection and paragraph (5) of subsection (d)’ for ‘paragraphs (1) and (2)’.
1982 — Subsec. (b). Pub. L. 97-248, Sec. 209(c), inserted provision that for purposes of determining whether section 38 property subject to a lease is new section 38 property, such property shall be treated as originally placed in service not earlier than the date such property is used under the lease, but only if such property is leased within 3 months after such property is placed in service.
Subsec. (c)(2)(D). Pub. L. 97-354, Sec. 3(d), substituted ‘Partnerships and S corporations’ for ‘Partnerships’ in subpar. heading, and inserted ‘A similar rule shall apply in the case of an S corporation and its shareholders’.
Pub. L. 97-248, Sec. 205(a)(1), redesignated subsec. (q) as (r).
Subsec. (d)(5). Pub. L. 97-248, Sec. 205(a)(4), added par. (5).
Subsec. (e). Pub. L. 97-354, Sec. 5(a)(7), struck out subsec. (e) relating to apportionment among shareholders of qualified investments by an electing small business corporation.
Subsec. (g)(5). Pub. L. 97-248, Sec. 205(a)(5)(A), struck out par. (5) which, as amended by Sec. 102(f)(3) of Pub. L. 97-448, had provided that for purposes of this subtitle, if a credit were determined under section 46(a)(2) for any qualified rehabilitation expenditure in connection with a qualified rehabilitated building other than a certified historic structure, the increase in basis of such property which would (but for this paragraph) have resulted from such expenditure had to be reduced by the amount of the credit so determined, that if during any taxable year there was a recapture amount determined with respect to any qualified rehabilitated building the basis of which was reduced under subpar. (A), the basis of such building (immediately before the event resulting in such recapture), had to be increased by an amount equal to such recapture amount, and that for purposes of this paragraph ‘recapture amount’ was defined as any increase in tax (or adjustment in carrybacks or carryovers) determined under section 47(a)(5). See 1983 Amendment note for subsec. (g)(5) above and see Effective Date of 1982 and 1983 Amendment notes set out under sections 1 and 196 of this title.
Subsec. (k)(5)(D)(i). Pub. L. 97-354, Sec. 5(a)(8), substituted ‘an S corporation’ for ‘an electing small business corporation (within the meaning of section 1371)’.
Subsec. (l)(7). Pub. L. 97-362, Sec. 104(a), temporarily substituted the qualification that such term does not include equipment for hydrogenation, refining, or other process subsequent to retorting other than hydrogenation or other process which is applied in the vicinity of the property from which the shale was extracted and which is applied to bring the shale oil to a grade and quality suitable for transportation to and processing in a refinery, for the qualification that such equipment did not include equipment for hydrogenation, refining, or other processes subsequent to retorting. See Effective and Termination Dates of 1982 Amendment note below.
Subsecs. (q), (r). Pub. L. 97-248, Sec. 205(a)(1), added subsec. (q) and redesignated former subsec. (q) as (r).
1981 — Subsec. (a)(1). Pub. L. 97-34, Sec. 211(e)(4), in provisions following subpar. (G), substituted ‘Such term includes only recovery property (within the meaning of section 168 without regard to any useful life) and any other property’ for ‘Such term includes only property’.
Subsec. (a)(1)(G). Pub. L. 97-34, Sec. 211(c), added subpar. (G).
Subsec. (a)(2)(B)(ii). Pub. L. 97-34, Sec. 211(h), designated existing provisions as subcl. (I) and added subcl. (II).
Subsec. (a)(3)(D). Pub. L. 97-34, Sec. 212(c), added subpar. (D).
Subsec. (a)(4). Pub. L. 97-34, Sec. 214(a), inserted provision that, if any qualified rehabilitated building is used by the tax-exempt organization pursuant to a lease, this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.
Subsec. (a)(5). Pub. L. 97-34, Sec. 214(b), inserted provision that, if any qualified rehabilitated building is used by the governmental unit pursuant to a lease, this paragraph shall not apply to that portion of the basis of such building which is attributable to qualified rehabilitation expenditures.
Subsec. (a)(8). Pub. L. 97-34, Sec. 212(d)(2)(A), substituted ‘or 188’ for ‘188, or 191’.
Subsec. (a)(9). Pub. L. 97-34, Sec. 211(a)(2), struck out par. (9) which set out a special rule for the depreciation of railroad track.
Subsec. (c)(2)(A) to (C). Pub. L. 97-34, Sec. 213(a), amended subpars. (A) to (C) generally raising in subpar. (A) the existing $100,000 dollar limitation to $125,000 in 1981 and to $150,000 in 1985 and in subpar. (B) the existing $50,000 dollar limitation to $62,500 in 1981 and to $75,000 in 1985.
Subsec. (g). Pub. L. 97-34, Sec. 212(b), in amending subsec. (c) generally incorporated the concept of ‘substantial rehabilitation’ into par. (1)(A), substituted ‘30 years’ for ‘20 years’ as the requisite period in par. (1)(B), substituted a definition of ‘substantially rehabilitated’ for former provisions that a major portion could be treated as a separate building in certain cases in par. (1)(C), reenacted par. (1)(D) without change, substituted ‘December 31, 1981’ for ‘October 31, 1978’ in provisions of par. (2)(A) preceding cl. (i), substituted provisions for a recovery period of 15 years for provisions that had provided for a useful life of 5 years or more in cl. (i) of par. (2)(A), reenacted cl. (ii) without change, substituted provisions that accelerated methods of depreciation may not be used for provisions relating to property otherwise section 38 property in cl. (i) of par. (2)(B), reenacted cls. (ii) and (iii) without change, revised the provisions of cl. (iv) relating to certified historic structures, and added cl. (v) relating to expenditures of lessees, added par. (3), redesignated former par. (3) as (4), and added par. (5).
Subsec. (l)(2)(C). Pub. L. 97-34, Sec. 211(e)(3), inserted ‘or which is recovery property (within the meaning of section 168)’ after ‘3 years or more’.
Subsec. (n)(1)(A)(i). Pub. L. 97-34, Sec. 332(b), substituted ‘which does not exceed’ for ‘equal to’.
Subsec. (o)(8). Pub. L. 97-34, Sec. 212(a)(3), added par. (8).
1980 — Subsec. (a)(1). Pub. L. 96-451, Sec. 302(a)(1), (2), (3), added subpar. (F) and provision for treatment of the useful life of subpar. (F) property as its normal growing period.
Subsec. (a)(2)(B)(xi). Pub. L. 96-223, Sec. 222(i)(2), added cl. (xi).
Subsec. (a)(5). Pub. L. 96-605, Sec. 109(a), included the International Maritime Satellite Organization or any successor organization within organizations not to be treated as international organizations.
Subsec. (a)(7)(B). Pub. L. 95-600, Sec. 312(c)(2), as amended by Pub. L. 96-222, Sec. 103(a)(2)(A), substituted ‘ ‘described in section 50 (as in effect before its repeal by the Revenue Act of 1978’ ‘ for ‘ ‘described in section 50’ ‘.
Subsec. (a)(10)(A). Pub. L. 96-223, Sec. 223(a)(1), as amended by Pub. L. 97-448, Sec. 202(c), provided that ‘petroleum or petroleum products’ does not include petroleum coke or petroleum pitch.
Subsec. (a)(10)(B). Pub. L. 96-222, Sec. 108(c)(6), substituted ‘5’ for ‘51’.
Subsec. (g)(2)(B)(i). Pub. L. 96-222, Sec. 103(a)(4)(B), substituted ‘subsections (a)(1)(E) and (l)’ for ‘subsection (a)(1)(E)’.
Subsec. (o). Pub. L. 96-222, Sec. 101(a)(7)(L)(iii)(III) (v)(iv) and (V), struck out “ESOP” each place it appeared and inserted “employee plan”; amended paragraph headings of Code Sec. 48(o), (5), (6) and (7), struck out “ESOP” and inserted “EMPLOYEE PLAN”; and amended the paragraph heading of Code Sec. 48(o)(3), struck out “ESOP” and inserted “Employee Plan”.
Subsec. (o)(5). Pub. L. 96-222, Sec. 101(a)(7)(M)(iii), as amended by Sec. 101(a)(7)(l), added “percentage” after “attributable to the matching employee plan”.
Subsec. (l)(1). Pub. L. 96-223, Sec. 221(b)(1), substituted ‘For any period for which the energy percentage determined under section 46(a)(2)(C) for any energy property is greater than zero’ for ‘For the period beginning on October 1, 1978, and ending on December 31, 1982’ in provisions preceding subpar. (A) and, in subpars. (A) and (B), substituted ‘such energy property’ and ‘such property’ for ‘any energy property’.
Subsec. (l)(2)(A). Pub. L. 96-223, Sec. 222(a), added cls. (vii), (viii), and (ix).
Subsec. (l)(3)(A). Pub. L. 96-223, Sec. 222(b), (g)(2), struck out ‘(other than coke or coke gas)’ after ‘solid fuel’ in cl. (iii) and, in cl. (v), substituted provisions relating to equipment which converts coal into a substitute for a petroleum or natural gas derived feedstock for the manufacture of chemicals or other products and equipment which converts coal into methanol, ammonia, or hydroprocessed coal liquid or solid for provisions which had related simply to equipment which used coal as feedstock for the manufacture of chemicals or other products other than coke or coke gas, added cl. (ix), and, following cl. (ix), inserted provision that the equipment described in cl. (vii) includes equipment used for the storage of fuel derived from garbage at the site at which such fuel was produced from garbage.
Subsec. (l)(3)(B). Pub. L. 96-223, Sec. 222(i)(1)(A), redesignated subpar. (C) as (B). Former subpar. (B), which excluded public utility property from the terms ‘alternative energy property’, ‘solar or wind energy property’, or ‘recycling equipment’, was struck out.
Subsec. (l)(3)(C), (D). Pub. L. 96-223, Sec. 222(i)(1)(A), (3), redesignated subpar. (D) as (C) and inserted following cl. (ii) provision that, for the purposes of the preceding sentence, in the case of property which is alternative energy property solely by reason of the amendments made by section 222(b) of the Crude Oil Windfall Profit Tax Act of 1980, ‘January 1, 1980’ was to be substituted for ‘October 1, 1978’. Former subpar. (C) redesignated (B).
Subsec. (l)(4)(C). Pub. L. 96-223, Sec. 222(c), added subpar. (C).
Subsec. (l)(5). Pub. L. 96-223, Sec. 222(d), added subpar. (L), redesignated former subpar. (L) as (M), and inserted provision that the Secretary shall not specify any property under subpar. (M) unless he determines that such specification meets the requirements of par. (9) of section 44C(c) for specification of items under section 44C(c)(4)(A)(viii).
Subsec. (l)(11). Pub. L. 96-223, Sec. 221(b)(2), substituted ‘one-half of the energy percentage determined under section 46(a)(2)(C)’ for ‘5 percent’.
Pub. L. 96-223, Sec. 223(c)(1), completely revised par. (11) to incorporate property financed by subsidized energy financing, effective with regard to periods after Dec. 31, 1982. Prior to the revision par. (11) read as follows: ‘In the case of property which is financed in whole or in part by the proceeds of an industrial development bond (within the meaning of section 103(b)(2)) the interest on which is exempt from tax under section 103, the energy percentage shall be one-half of the energy percentage determined under section 46(a)(2)(C).’
Subsec. (l)(13). Pub. L. 96-223, Sec. 222(e)(1), added par. (13).
Subsec. (l)(14). Pub. L. 96-223, Sec. 222(f), added par. (14).
Subsec. (l)(15). Pub. L. 96-223, Sec. 222(g)(1), added par. (15).
Subsec. (l)(16). Pub. L. 96-223, Sec. 222(h), added par. (16).
Subsec. (l)(17). Pub. L. 96-223, Sec. 222(i)(1)(B), added par. (17).
Subsec. (n). Pub. L. 96-222, Sec. 101(a)(7)(G), (H), (L)(i)(I)-(IV), (ii)(III)-(VI), (iii)(II), (v)(II)-(IV), (M)(ii), amended subsec. (n) generally to reflect the renaming of an investment tax credit ESOP to a tax credit employee stock ownership plan and a leveraged employee stock ownership plan (commonly referred to as an ESOP) to an employee stock ownership plan.
Subsec. (n)(6)(B)(i). Pub. L. 96-605, Sec. 223(a), substituted ‘the date on which the securities are contributed to the plan’ for ‘the due date for filing the return for the taxable year (determined with regard to extensions)’.
Subsec. (o). Pub. L. 96-222, Sec. 101(a)(7)(L)(iii)(III), (v)(IV), (V), (M)(iii), substituted ‘employee plan’ for ‘ESOP’ wherever appearing and inserted ‘percentage’ after ‘attributable to the matching employee plan’ in par. (5).
1978 - Subsec. (a)(1)(A). Pub. L. 95-618, Sec. 301(d)(1), inserted ‘(other than an air conditioning or heating unit)’ after ‘personal property’.
Subsec. (a)(1)(D). Pub. L. 95-600, Sec. 314(a), added par. (D).
Subsec. (a)(1)(E). Pub. L. 95-600, Sec. 315(a), added par. (E).
Subsec. (a)(2)(B)(ii). Pub. L. 95-473, Sec. 2(a)(2)(A), substituted ‘providing transportation subject to subchapter I of chapter 105 of title 49’ for ‘subject to part I of the Interstate Commerce Act’.
Subsec. (a)(7)(A). Pub. L. 95-600, Sec. 312(c)(3), struck out ‘(other than pretermination property)’ after ‘Property’.
Subsec. (a)(7)(B). Pub. L. 95-600, Sec. 312(c)(2), struck out ‘described in section 50’ after ‘with respect to property’. See 1980 Amendment note above.
Subsec. (a)(8). Pub. L. 95-600, Sec. 315(c), substituted ‘188, or 191’ for ‘or 188’.
Subsec. (a)(10). Pub. L. 95-618, Sec. 301(d)(2), added par. (10).
Pub. L. 95-600, Sec. 314(b), (c), redesignated (p) as (q).
Subsec. (c)(2). Pub. L. 95-600, Sec. 311(b), struck “and before January 1, 1981”
Subsec. (d)(1)(B). Pub. L. 95-600, Sec. 703(a)(3), substituted ‘section 46(a)(6)’ for ‘section 46(a)(5)’.
Subsec. (d)(4)(D). Pub. L. 95-600, Sec. 703(a)(4), substituted ‘section 57(c)(1)(B)’ for ‘section 57(c)(2)’.
Subsec. (g). Pub. L. 95-600, Sec. 315(b), added subsec. (g).
Subsec. (h). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec. (h) which related to suspension of investment credit.
Subsec. (i). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec. (i) which related to an exemption from suspension of $20,000 of investment.
Subsec. (j). Pub. L. 95-600, Sec. 312(c)(1), struck out subsec. (j) which defined ‘suspension period’.
Subsecs. (l), (m). Pub. L. 95-618, Sec. 301(b), added subsecs. (l) and (m) and redesignated former subsec. (l) as (n).
Subsec. (n). Pub. L. 95-618, Sec. 301(b), redesignated former subsec. (l) as (n).
Pub. L. 95-600, Sec. 141(b), added subsec. (n). Former subsec. (n) redesignated (p).
Subsec. (o). Pub. L. 95-600, Sec. 141(b), added subsec. (o).
Subsecs. (p), (q). Pub. L. 95-600, Sec. 141(b), 314(b), added subsec. (p). Former subsec. (n) redesignated (p) and subsequently as (q).
Pub. L. 95-600, Sec. 141(b), (g)(1), Redesignated (n), formerly (l), and added new sec. (n).
1976 - Subsec. (a)(2)(B)(vi). Pub. L. 94-455, Sec. 1901(a)(5)(A), substituted ‘(43 U.S.C. 1331))' for ‘; 43 U.S.C., sec. 1331)’.
Subsec. (a)(2)(B)(vii). Pub. L. 94-455, Sec. 1051(h)(1), substituted ‘(other than a corporation which has an election in effect under section 936 or which is entitled to the benefits of section 934(b))’ for ‘(other than a corporation entitled to the benefits of section 931 or 934(b))’.
Subsec. (a)(2)(B)(viii). Pub. L. 94-455, Sec. 1901(a)(5)(B), substituted ‘47 U.S.C. 702‘ for ‘47 U.S.C., sec. 702’.
Subsec. (a)(8). Pub. L. 94-455, Sec. 1901(b)(11)(A), 2112(a)(1), struck out ‘169,’ after ‘section 167(k),’, ‘187,’ before ‘or 188 applies’, and provisions relating to the limitation of the applicability of this paragraph on property to which section 169 applies.
Subsecs. (c)(2)(A), (d)(1), (2)(A). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (f). Pub. L. 94-455, Sec. 802(b)(6), substituted ‘section 46(a)(3)’ for ‘section 46(a)(2)’.
Subsec. (i)(2). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’.
Subsecs. (k), (l). Pub. L. 94-455, Sec. 804(a), added subsec. (k) and redesignated former subsec. (k) as subsec. (l).
1975 - Subsec. (a)(2)(B). Pub. L. 94-12, Sec. 604(a), substituted ‘territorial waters within the northern portion of the Western Hemisphere’ for ‘territorial waters’ in cl. (x) and inserted definition of ‘northern portion of the Western Hemisphere’ following cl. (x).
Subsec. (c)(2)(A). Pub. L. 94-12 Sec. 301(c)(1)(A), substituted ‘$100,000’ for ‘$50,000’.
Subsec. (c)(2)(B). Pub. L. 94-12, Sec. 301(c)(1)(A), (B), substituted ‘$50,000’ for ‘$25,000’ and ‘$100,000’ for ‘$50,000’.
Subsec. (c)(2)(C). Pub. L. 94-12, Sec. 301(c)(1)(A), substituted ‘$100,000’ for ‘$50,000’.
Subsec. (d)(1), (2)(A). Pub. L. 94-12, Sec. 302(c)(3), substituted ‘section 46(e)(1)’ for ‘section 46(d)(1)’.
Subsec. (a)(1)(B)(ii), (iii). Pub. L. 92-178, Sec. 104(a)(1), substituted ‘research facility’ for ‘research or storage facility’ in cl. (ii) and added cl. (iii).
Subsec. (a)(2)(B). Pub. L. 92-178, Sec. 104(c)(2), (3), (d), added cls. (viii) to (x), respectively.
Subsec. (a)(3)(C). Pub. L. 92-178, Sec. 104(b), added subpar. (C).
Subsec. (a)(5). Pub. L. 92-178, Sec. 104(c)(1), inserted ‘(other than the International Telecommunications Satellite Consortium or any successor organization)’ after ‘international organization’.
Subsec. (a)(6). Pub. L. 92-178, Sec. 104(e), substituted provisions for treatment of livestock (other than horses) acquired by the taxpayer as section 38 property, with exception provision for reduction of acquisition cost by amount equal to amount realized on sale or other disposition under certain circumstances, and for nontreatment of horses as section 38 property for former provision that livestock shall not be treated as section 38 property.
Subsec. (a)(7) to (9). Pub. L. 92-178, Sec. 103, 104(f)(1), (g), added pars. (7) to (9), respectively.
Subsec. (d). Pub. L. 92-178, Sec. 108(b) and (c), substituted ‘section 46(d)(1)’ for ‘section 46(d)’; and designated as par. (1) the present first sentence, redesignated as subpars. (A) and (B) provisions formerly designated cls. (1) and (2), again substituted ‘section 46(d)(1)’ for ‘section 46(d)’ in par. (1) and inserted ‘(other than property described in paragraph (4))’ in par. (1), added pars. (2) and (4), incorporated provisions of former second, third, and fourth sentences in provisions designated as par. (3), substituted in par. (3) ‘the lessee shall be treated for all purposes of this subpart as having acquired a fractional portion of such property equal to the fraction determined under paragraph (2)(B) with respect to such property’ for ‘the lessee shall be treated for all purposes of this subpart as having acquired such property’, and struck out former fifth and sixth sentences respecting election regarding treatment of leases of suspension period property and section 38 property. See Effective Date of 1971 Amendment note below.
1976 - Sec. 801. of Pub. L. 94-455, amended paragraph (2) of sec. 301(c) by substituting “January 1, 1981” for “January 1, 1977.”
Subsec. (k). Pub. L. 94-455, Sec. 804(a), redesignated (k) as (l) and inserted a new sec. (k).
Pub. L 94-455, Sec. 1906(b)13)(A), substituted “Secretary" for “Secretary or his delegate” each place it appeared.
1971 - Subsec. (a)(1). Pub. L. 92-178, Sec. 102(a)(2), substituted ‘3 years’ for ‘4 years’ in second sentence.
Subsec. (d). Pub. L. 92-178, Sec. 108(b), substituted “section 46(d)(1)" for section “46(d).”
1969 - Subsec. (a)(4). Pub. L. 91-172, Sec. 121(d)(2)(A), inserted provision relating to the percentage of the basis or cost of debt-financed property that may be considered in computing qualified investment under section 46(c) of this title.
Subsec. (c)(2)(C). Pub. L. 91-172, Sec. 401(e)(2), reenacted subpar. (C) with minor changes and substituted reference to controlled group for reference to affiliated group.
Subsec. (c)(3)(C). Pub. L. 91-172, Sec. 401(e)(3), substituted definition of controlled group for definition of affiliated group.
Subsec. (d)(2). Pub. L. 91-172, Sec. 401(e)(4), substituted reference to a component member of a controlled group for reference to a member of an affiliated group.
1967 - Subsec. (a)(2)(B)(i). Pub. L. 90-26, Sec. 3, inserted ‘or is operated under contract with the United States’ after ‘the United States’.
Subsec. (h)(2). Pub. L. 90-26, Sec. 2(a), limited definition of suspension period property to section 38 property where the physical construction, reconstruction or erection was begun before May 24, 1967, pursuant to an order placed during the suspension period, subject to the proviso that in applying the definition to property the physical construction, reconstruction or erection of which was begun before May 24, 1967, only that portion of the basis properly attributable to construction, reconstruction or erection before May 24, 1967 be taken into account.
Subsec. (j). Pub. L. 90-26, Sec. 1, substituted ‘March 9, 1967’ for ‘December 31, 1967’.
1966 - Subsec. (a)(2)(B). Pub. L. 89-809, Sec. 201(a), added cl. (vii).
Subsec. (d). Pub. L. 89-800, Sec. 1(b), inserted provisions covering the treatment of suspension period property, and the elections to be deemed made in connection therewith.
Subsecs. (h) to (k). Pub. L. 89-800, Sec. 1(a), added subsecs. (h) to (j) and redesignated former subsec. (h) as (k).
1964 - Subsec. (a)(1)(C). Pub. L. 88-272, Sec. 203(c)(2), added subpar. (C).
Subsec. (d). Pub. L. 88-272, Sec. 203(a)(3)(A), (b), substituted ‘except as provided in paragraph (2)’ for ‘if such property was constructed by the lessor (or by a corporation which controls or is controlled by the lessor within the meaning of section 368(c))’ in par. (1), ‘if such property is leased by a corporation which is a member of an affiliated group (within the meaning of section 46(a)(5) to another corporation which is a member of the same affiliated group’ for ‘if paragraph (1) does not apply’ in par. (2), and deleted provisions which stated that if a lessor made an election under this subsection, subsec. (g) would not apply with respect to such property, and deductions otherwise allowable under section 162 to the lessee for amounts paid the lessor would be adjusted consistent with subsec. (g).
Subsec. (g). Pub. L. 88-272, Sec. 203(a)(1), repealed subsec. (g) which required that the basis of section 38 property be reduced by 7 percent of the qualified investment.
1962 - Pub. L. 87-834, Sec. 2, added sections 46, 47, 48.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(20)-(23), effective March 23, 2018.
Amendment by Pub. L. 115-123, Sec. 40409(b), effective on January 1, 2017.
Amendments by Pub L. 115-123, Sec. 40411(a), effective for periods after December 31, 2016, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Amendments by Pub L. 115-123, Sec. 40411(b), effective on the date of the enactment of this Act [Enacted: Feb. 9, 2018].
Amendments by Pub L. 115-123, Sec. 40411(e), effective for property placed in service after December 31, 2016.
EFFECTIVE DATE OF 2015 AMENDMENTS
Amendments by Pub. L. 114-113, Div. P, Sec. 302, effective on January 1, 2015.
Amendments by Pub. L. 114-113, Div. P, Sec. 303, effective on the date of the enactment of this Act [Enacted: Dec. 18, 2015].
Amendment by Pub. L. 114-113, Div. Q, Sec. 187(b), effective on January 1, 2015.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendment by Pub. L. 113-295, Div. A, Sec. 155(b), effective on January 1, 2014.
Amendment by Pub. L. 113-295, Div. A, Sec. 209(d), effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009 [Pub. L. 111-5, Sec. 1104] to which they relate [Effective Feb. 17, 2009].
EFFECTIVE DATE OF 2013 AMENDMENTS
Amendment by Sec. 407(b) of Pub. L. 112-240 effective on the date of the enactment of this Act [Enacted: Jan. 2, 2013].
Amendments by Sec. 407(c) of Pub. L. 112-240 effective as if included in the enactment of the provisions of the American Recovery and Reinvestment Act of 2009 [Pub. L. 111-5, Sec. 1102, effective for facilities placed in service after December 31, 2008] to which they relate.
EFFECTIVE DATE OF 2009 AMENDMENTS
Amendment by Div. B, Sec. 1102(a) of Pub. L. 111-5 effective for facilities placed in service after December 31, 2008.
Amendments by Div. B, Sec. 1103 of Pub. L. 111-5 effective for periods after December 31, 2008, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Amendment by Div. B, Sec. 1104 of Pub. L. 111-5 effective on the date of the enactment of this Act [Enacted: Feb. 17, 2009].
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Div. B, Sec. 103(a) of Pub. L. 110-343 effective on the date of the enactment of this Act [Enacted: Oct. 3, 2008].
Amendments by Div. B, Sec. 103(b) of Pub. L. 110-343 effective for credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act [Enacted: Oct. 3, 2008] and to carrybacks of such credits.
Amendments by Div. B, Sec. 103(c)-(d) of Pub. L. 110-343 effective for periods after the date of the enactment of this Act [Enacted: Oct. 3, 2008], in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Amendments by Div. B, Sec. 103(e) of Pub. L. 110-343 effective for periods after February 13, 2008, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Amendments by Div. B, Sec. 104 of Pub. L. 110-343 effective for periods after the date of the enactment of this Act [Enacted: Oct. 3, 2008], in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
Amendments by Div. B, Sec. 105 of Pub. L. 110-343 effective for periods after the date of the enactment of this Act [Enacted: Oct. 3, 2008], in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by section 11(a) of Pub. L. 110-172 effective on the date of the enactment of this Act [Enacted: Dec. 29, 2007].
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendments by section 207 of Pub. L. 109-432 effective on the date of the enactment of this Act [Enacted: Dec. 20, 2006].
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendments by section 412(m) and (n) of Pub. L. 109-135 effective on the date of the enactment of this Act [Enacted: Dec. 21, 2005].
Amendments by sections 1336 and 1337 of Pub. L. 109-58 effective for periods after December 31, 2005, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by section 322(d) of Pub. L. 108-357 effective with respect to expenditures paid or incurred after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by section 710(e) of Pub. L. 108-357 effective for electricity produced and sold after the date of the enactment of this Act [Enacted: Oct. 22, 2004], in taxable years ending after such date.
EFFECTIVE DATE OF 1992 AMENDMENTS
Amendment by section 1916(a) of Pub. L. 102-486 effective June 30, 1992.
EFFECTIVE DATE OF 1990 AMENDMENTS
Amendment by section 11813(a) 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.
Amendment by section 11821(b) of Pub. L. 101-508 generally effective on November 5, 1990, provided the Savings Provision:"(1)If any provision amended or repealed by this part 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 made by this part) affect liability for tax for periods ending after such date of enactment, nothing in the amendments made by his part 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 1988 AMENDMENTS
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 AMENDMENTS
If any interest costs incurred after Dec. 31, 1986, are attributable to costs incurred before Jan. 1, 1987, the amendment by section 803(b)(2)(B) of Pub. L. 99-514 is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by section 803 of Pub. L. 99-514) or, if applicable, section 266 of such Code, see section 7831(d)(2) of Pub. L. 101-239, set out as an Effective Date note under section 263A of this title.
Amendment by section 251(b), (c) of Pub. L. 99-514 applicable to property placed in service after Dec. 31, 1986, in taxable years ending after such date, except as otherwise provided for certain rehabilitations see section 251(d) of Pub. L. 99-514, set out as a note under section 46 of this title.
Amendment by section 701(e)(4)(C) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99-514, set out as an Effective Date note under section 55 of this title.
Amendment by section 803(b)(2)(B) of Pub. L. 99-514 applicable to costs incurred after Dec. 31, 1986, in taxable years ending after such date, except as otherwise provided, see section 803(d) of Pub. L. 99-514, set out as an Effective Date note under section 263A of this title.
Amendment by sections 1272(d)(5) and 1275(c)(5) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 1277 of Pub. L. 99-514, set out as a note under section 931 of this title.
Amendment by section 1511(c)(3) of Pub. L. 99-514 applicable for purposes of determining interest for periods after Dec. 31, 1986, see section 1511(d) of Pub. L. 99-514, set out as a note under section 47 of this title.
Section 1879(j)(2) of Pub. L. 99-514 provided that: ‘The amendments made by this subsection (amending this section) shall apply to periods after December 31, 1978 (under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1954 (now 1986)), in taxable years ending after such date.’
Section 1881 of title XVIII of Pub. L. 99-514 provided that: ‘Except as otherwise provided in this subtitle, any amendment made by this subtitle (subtitle A (Sec. 1801-1881) of title XVIII of Pub. L. 99-514, see Tables for classification) shall take effect as if included in the provision of the Tax Reform Act of 1984 (Pub. L. 98-369, div. A) to which such amendment relates.'
EFFECTIVE DATE OF 1985 AMENDMENTS
Amendment by Pub. L. 99-121 applicable with respect to property placed in service by the taxpayer after May 8, 1985, with specified exceptions, but amendment of subsec. (g)(2)(B)(v) not applicable to leases entered into before May 22, 1985, if the lessee signed the lease before May 17, 1985, see section 105(b)(1), (5) of Pub. L. 99-121, set out as a note under section 168 of this title.
EFFECTIVE DATE OF 1984 AMENDMENTS
Section 18 of Pub. L. 98-369 provided that:
‘(a) General Rule. — The amendments made by this part (part I (Sec. 11-18) of subtitle A of title I of div. A of Pub. L. 98-369, amending this section and sections 41, 46, 57, 128, 168, 179, 265, 415, 854, 857, and 911 of this title, enacting provisions set out as a note under section 168 of this title, and amending provisions set out as notes under sections 128 and 168 of this title) shall apply to taxable years ending after December 31, 1983.
‘(b) Special Rule for Section 14. — The amendment made by section 14 (amending section 41 of this title) shall not apply in the case of a tax credit employee stock ownership plan if —
‘(1) such plan was favorably approved on September 23, 1983, by employees, and
‘(2) not later than January 11, 1984, the employer of such employees was 100 percent owned by such plan.’
Amendment by section 31(b), (c)(1) of Pub. L. 98-369 effective, except as otherwise provided in section 31(g) of Pub. L. 98-369, as to property placed in service by the taxpayer after May 23, 1983, in taxable years ending after such date and 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, and amendment by section 31(c)(2) of Pub. L. 98-369, to the extent it relates to section 168(f)(12) of this title, effective as if it had been included in the amendments to section 168 of this title by section 216(a) of Pub. L. 97-248, see section 31(g)(1), (12) of Pub. L. 98-369, set out as a note under section 168 of this title.
Amendment by section 111(e)(8) of Pub. L. 98-369 applicable with respect to property placed in service by the taxpayer after Mar. 15, 1984, subject to certain exceptions, see section 111(g) of Pub. L. 98-369, set out as a note under section 168 of this title.
Amendment by section 113(b)(3) of Pub. L. 98-369 applicable as if included in the amendments made by sections 201(a), 211(a)(1), and 211(f)(1) of Pub. L. 97-34, which enacted section 168 and amended section 46 of this title, see section 113(c)(2)(B) of Pub. L. 98-369, set out as a note under section 168 of this title.
Amendment by section 113(b)(4) of Pub. L. 98-369 applicable as if included in the amendments made by section 205(a)(1) of Pub. L. 97-248, see section 113(c)(2)(C) of Pub. L. 98-369, set out as a note under section 168 of this title.
Section 113(c)(1) of Pub. L. 98-369 provided that: ‘The amendments made by subsection (a) (amending this section and section 168 of this title) shall apply to property placed in service after March 15, 1984, in taxable years ending after such date.’
Section 114(b) of Pub. L. 98-369 provided that: ‘The amendment made by this section (amending this section) shall apply to property originally placed in service after April 11, 1984 (determined without regard to such amendment).’
Amendment by section 431(c) of Pub. L. 98-369 applicable to property placed in service after July 18, 1984, in taxable years ending after such date, but not applicable to property to which sections 46(c)(8), (9) and 47(d) of this title, as enacted by section 211(f) of Pub. L. 97-34, do not apply, with the taxpayer having an option to elect retroactive application of amendment by Pub. L. 98-369, see section 431(e) of Pub. L. 98-369, set out as a note under section 46 of this title.
Amendment by section 474(o)(10)-(18) 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.
Section 474(o)(15) of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘Subsection (n) of section 48 (relating to requirements for allowance of employee plan percentage) is hereby repealed; except that paragraph (4) of section 48(n) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as in effect before its repeal by this paragraph) shall continue to apply in the case of any recapture under section 47(f) of such Code of a credit allowable for a taxable year beginning before January 1, 1984.'
Amendment by section 712(b) of Pub. L. 98-369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, to which such amendment relates, see section 715 of Pub. L. 98-369, set out as a note under section 31 of this title.
Amendment by section 721(x)(1) of Pub. L. 98-369 effective as if included in the Subchapter S Revision Act of 1982, Pub. L. 97-354, see section 721(y)(1) of Pub. L. 98-369, set out as a note under section 1361 of this title.
Amendment by section 735(c)(1) of Pub. L. 98-369 effective, except as otherwise provided, as if included in the provisions of the Highway Revenue Act of 1982, title V of Pub. L. 97-424, to which such amendment relates, see section 736 of Pub. L. 98-369, set out as a note under section 4051 of this title.
Section 1043(b) of Pub. L. 98-369 provided that: ‘The amendments made by this section (amending this section) shall apply to expenditures incurred after December 31, 1983, in taxable years ending after such date.’
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.
Amendment by section 202(c) of Pub. L. 97-448 effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980, Pub. L. 96-223 to which such amendment relates, see section 203(a) of Pub. L. 97-448, set out as a note under section 6652 of this title.
Amendment by section 306(a)(3) of Pub. L. 97-448 effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, to which such amendment relates, see section 311(d) of Pub. L. 97-448, set out as a note under section 31 of this title.
EFFECTIVE AND TERMINATION DATES OF 1982 AMENDMENTS
Section 104(b) of Pub. L. 97-362, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendment made by this section (amending this section) shall apply to periods beginning after December 31, 1980, and before January 1, 1983, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954).'
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.
Amendment by section 205(a)(1), (4), (5)(A) of Pub. L. 97-248, applicable to periods after Dec. 31, 1982, under rules similar to the rules of subsec. (m) of this section, with certain exceptions and qualifications, see section 205(c)(1) of Pub. L. 97-248, set out as an Effective Date note under section 196 of this title.
Amendment by section 209(c) of Pub. L. 97-248 applicable to property placed in service after Dec. 31, 1983, but not to qualified leased property described in section 168(f)(8)(D)(v) of this title which is placed in service before Jan. 1, 1988, or is placed in service after such date pursuant to a binding contract or commitment entered into before April 1, 1983, and 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, see sections 208(d)(5) and 209(d)(2) of Pub. L. 97-248, set out as notes under section 168 of this title.
EFFECTIVE DATE OF 1981 AMENDMENTS
Section 212(e)(2) of Pub. L. 97-34, as amended by Pub. L. 97-448, Sec. 102(f)(1), provided the following transitional rule: “(2) The amendments made by this section shall not apply with respect to any rehabilitation of a building if (A) the physical work on such rehabilitation begn before January 1, 1982, and (B) such building does not meet the requirements of paragraph (1) of section 48(g) of the Internal Revenue Code of 1954 (as amended by this Act).”
Section 213(b) of Pub. L. 97-34, as amended by Pub. L. 97-448, title I, Sec. 102(g), Jan. 12, 1983, 96 Stat. 2372, provided that: ‘The amendment made by this section (amending this section) shall apply to taxable years beginning after December 31, 1980.’
Section 214(c) of Pub. L. 97-34 provided that: ‘The amendments made by this section (amending this section) shall apply to uses after July 29, 1980, in taxable years ending after such date.’
Section 332(c)(2) of Pub. L. 97-34 provided that: ‘The amendment made by subsection (b) (amending this section) shall apply to qualified investments made after December 31, 1981.’
Amendment by section 211(a)(2), (e)(3), (4) of Pub. L. 97-34 applicable to property placed in service after Dec. 31, 1980, see section 211(i)(1) of Pub. L. 97-34, set out as a note under section 46 of this title.
Amendment by section 211(c) of Pub. L. 97-34 applicable to periods after Dec. 31, 1980, under rules similar to the rules under subsec. (m) of this section, see section 211(i)(3) of Pub. L. 97-34, set out as a note under section 46 of this title.
Amendment by section 211(h) of Pub. L. 97-34 applicable to taxable years beginning after Dec. 31, 1980, see section 211(i)(6) of Pub. L. 97-34, set out as a note under section 46 of this title.
Amendment by section 212(a)(3), (b), (c), (d)(2)(A) of Pub. L. 97-34 applicable to expenditures incurred after Dec. 31, 1981, in taxable years ending after such date, see section 212(e) of Pub. L. 97-34, set out as a note under section 46 of this title.
Amendment by section 212(e)(2) of Pub. L. 97-34 as amended by Pub. L. 97-448, Sec. 102(f)(1), provided the following: “(2)Transitional Rule The amendments made by this section shall not apply with respect to any rehabilitation of a building if the (A)physical work on such rehabilitation began before January 1, 1982, and (B) such building does not meet the requirements of paragraph (1) of section 48(g) of the Internal Revenue Code of 1954 (as amended by this Act)”.
EFFECTIVE DATE OF 1980 AMENDMENTS
Section 109(b) of Pub. L. 96-605 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning after December 31, 1979.’
Section 223(b) of Pub. L. 96-605 provided that: ‘The amendments made by subsection (a) (amending this section) shall apply with respect to taxable years beginning after December 31, 1980.’
Section 302(b) of Pub. L. 96-451 provided that: ‘The amendments made by this section (amending this section) shall apply with respect to additions to capital account made after December 31, 1979.’
Section 222(j) of Pub. L. 96-223, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. — Except as provided in paragraph (2), the amendments made by this section (amending this section and section 46 of this title) shall apply to periods after December 31, 1979, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954).
‘(2) Alumina electrolytic cells. — The amendments made by subsection (d)(1) (amending this section) shall apply to periods after September 30, 1978, under rules similar to the rules of section 48(m) of such Code.’
Section 223(a)(2) of Pub. L. 96-223, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendment made by paragraph (1) (amending this section) shall apply to periods after December 31, 1979, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954).'
Section 223(c)(2) of Pub. L. 96-223, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(A) In general. — Except as provided in subparagraph (B), the amendment made by paragraph (1) (amending this section) shall apply to periods after December 31, 1982, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954).'
‘(B) Earlier application for certain property. — In the case of property which is —
‘(i) qualified hydroelectric generating property (described in section 48(l)(2)(A)(vii) of such Code),
‘(ii) cogeneration equipment (described in section 48(l)(2)(A)(viii) of such Code),
‘(iii) qualified intercity buses (described in section 48(l)(2)(A)(ix) of such Code),
‘(iv) ocean thermal property (described in section 48(l)(3)(A)(ix) of such Code), or
‘(v) expanded energy credit property, the amendment made by paragraph (1) shall apply to periods after December 31, 1979, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986.
‘(C) Expanded energy credit property. – For purposes of subparagraph (B), the term ‘expanded energy credit property’ means —
‘(i) property to which section 48(l)(3)(A) of such Code applies because of the amendments made by paragraphs (1) and (2) of section 222(b) (amending this section),
‘(ii) property described in section 48(l)(4)(C) of such Code (relating to solar process heat),
‘(iii) property described in section 48(l)(5)(L) of such Code (relating to alumina electrolytic cells), and
‘(iv) property described in the last sentence of section 48(l)(3)(A) of such Code (relating to storage equipment for refuse-derived fuel).
‘(D) Financing taken into account. — For the purpose of applying the provisions of section 48(l)(11) of such Code in the case of property financed in whole or in part by subsidized energy financing (within the meaning of section 48(l)(11)(C) of such Code), no financing made before January 1, 1980, shall be taken into account. The preceding sentence shall not apply to financing provided from the proceeds of any tax exempt industrial development bond (within the meaning of section 103(b)(2) of such Code).’
Amendment by Pub. L. 96-222 effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. L. 96-222, set out as a note under section 32 of this title.
Section 108(c)(7) of Pub. L. 96-222 provided that: ‘Any amendment made by this subsection (amending sections 4071, 4221, 6416, and 6421 of this title) shall take effect as if included in the provision of the Energy Tax Act of 1978 (See Short Title of 1978 Amendment note set out under section 1 of this title) to which such amendment relates; except that the amendment made by paragraph (6) (amending this section) shall take effect on the first day of the first calendar month which begins more than 10 days after the date of the enactment of this Act (Apr. 1, 1980).’
Section 101(a)(7)(B) of Pub. L. 96-222, See the amendment note for sec. 101(a)(7)(B), Pub. L. 96-222, following te text of Code Sec. 409A(n).
Section 101(a)(7)(L)(iii)(III), (v)(IV) and (V) of Pub. L. 96-222, applicable to taxable years beginning after December 31, 1978.
EFFECTIVE DATE OF 1978 AMENDMENTS
Section 801 of Pub. L. 94-455 Amendment effective on February 1, 1977.
Section 301(d)(4) of Pub. L. 95-618 provided that:
‘(A) In general. — The amendments made by this subsection (amending this section and section 167 of this title) shall apply to property which is placed in service after September 30, 1978.
‘(B) Binding contracts. — The amendments made by this subsection (amending this section and section 167 of this title) shall not apply to property which is constructed, reconstructed, erected, or acquired pursuant to a contract which, on October 1, 1978, and at all times thereafter, was binding on the taxpayer.’
Amendment by section 141(b) of Pub. L. 95-600 effective with respect to qualified investment for taxable years beginning after Dec. 31, 1978, see section 141(g)(1) of Pub. L. 95-600, set out as an Effective Date note under section 409 of this title.
Amendment by section 312(c)(1), (2), (3) of Pub. L. 95-600 applicable to taxable years ending after Dec. 31, 1978, see section 312(d) of Pub. L. 95-600, set out as a note under section 46 of this title.
Amendment by section 312(c)(1)(d) of Pub. L. 95-600, Repealed Code Sec. 48(h), effective for tax years ending after December 31, 1978.
Amendment by section 312(c)(1)(d) of Pub. L. 95-600, Repealed Code Sec. 48(i), effective for tax years ending after December 31, 1978.
Amendment by section 312(c)(1)(d) of Pub. L. 95-600,, Repealed Code Sec. 48(j), effective for tax years ending after December 31, 1978.
Section 314(c) of Pub. L. 95-600 provided that: ‘The amendments made by subsections (a) and (b) (amending this section) shall apply to taxable years ending after August 15, 1971.’
Section 315(d) of Pub. L. 95-600 provided that: ‘The amendments made by this section (amending this section) shall apply to taxable years ending after October 31, 1978; except that the amendment made by subsection (c) shall only apply with respect to property placed in service after such date.’
Amendment by section 703(a)(3), (4) of Pub. L. 95-600 effective on Oct. 4, 1976, see section 703(r) of Pub. L. 95-600, set out as a note under section 46 of this title.
Section 311(b) of Pub. L. 95-600 Amendment effective on November 6, 1978.
EFFECTIVE DATE OF 1976 AMENDMENTS
Amendment by section 802(b)(6) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1975, see section 802(c) of Pub. L. 94-455, set out as a note under section 46 of this title.
Section 804(e) of Pub. L. 94-455, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. — The amendments made by subsections (a) and (b) (amending this section and section 47 of this title) shall apply to taxable years beginning after December 31, 1974.
‘(2) Election may also apply to property described in section 50(a). — At the election of the taxpayer, made within 1 year after the date of the enactment of this Act (Oct. 4, 1976) in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe, the amendments made by subsections (a) and (b) shall also apply to property which is property described in section 50(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) and which is placed in service in taxable years beginning before January 1, 1975.'
Amendment by section 1051(h)(1) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1975 with certain exceptions, see section 1051(i) of Pub. L. 94-455, set out as a note under section 27 of this title.
Amendment by section 1901(a)(5), (b)(11)(A) of Pub. L. 94-455 applicable with respect to 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.
Section 1906(b)(13)(A) of Pub. L. 94-455 Amendment effective on February 1, 1977.
Amendment by section 2112(a) of Pub. L. 94-455 applicable to property acquired by the taxpayer after Dec. 31, 1976, and property, the construction, reconstruction, or erection of which was completed by the taxpayer after Dec. 31, 1976, (but only to the extent of the basis thereof attributable to construction, reconstruction, or erection after such date), in taxable years beginning after such date, see section 2112(d)(1) of Pub. L. 94-455, set out as a note under section 46 of this title.
EFFECTIVE AND TERMINATION DATES OF 1975 AMENDMENT
Section 301(c)(2) of Pub. L. 94-12, as amended by Pub. L. 94-455, title VIII, Sec. 801, Oct. 4, 1976, 90 Stat. 1580; Pub. L. 95-600, title III, Sec. 311(b), Nov. 6, 1978, 92 Stat. 2824, provided that: ‘The amendments made by paragraph (1) (amending this section) shall apply only to taxable years beginning after December 31, 1974.’
Amendment by section 302(c)(3) of Pub. L. 94-12 applicable to taxable years ending after Dec. 31, 1974, see section 305(a) of Pub. L. 94-12, set out as an Effective Date of 1975 Amendment note under section 46 of this title.
Section 604(b) of Pub. L. 94-12, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) In general. — The amendments made by subsection (a) (amending this section) shall apply to property, the construction, reconstruction, or erection of which was completed after March 18, 1975, or the acquisition of which by the taxpayer occurred after such date.
‘(2) Binding contract. — The amendments made by subsection (a) (amending this section) shall not apply to property constructed, reconstructed, erected, or acquired pursuant to a contract which was on April 1, 1974, and at all times thereafter, binding on the taxpayer.
‘(3) Certain lease-back transactions, etc. — Where a person who is a party to a binding contract described in paragraph (2) transfers rights in such contract (or in the property to which such contract relates) to another person but a party to such contract retains a right to use the property under a lease with such other person, then to the extent of the transferred rights such other person shall, for purposes of paragraph (2), succeed to the position of the transferor with respect to such binding contract and such property. The preceding sentence shall apply, in any case in which the lessor does not make an election under section 48(d) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954), only if a party to such contract retains a right to use the property under a long-term lease.'
EFFECTIVE DATE OF 1971 AMENDMENT
Section 104(h) of Pub. L. 92-178, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendments made by this section (amending this section and sections 169 and 1245 of this title) (other than by subsections (c)(1), (c)(2), and (g) (amending this section)) shall apply to property described in section 50 of the Internal Revenue Code of 1986 (formerly I.R.C. 1954). The amendments made by subsections (c)(1), (c)(2), and (g) (amending this section) shall apply to taxable years ending after December 31, 1961.'
Amendment by section 108(b), (c) of Pub. L. 92-178, applicable to leases entered into after Sept. 22, 1971, and after Nov. 8, 1971, respectively, see section 108(d) of Pub. L. 92-178, set out as a note under section 46 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 121(d)(2)(A) of Pub. L. 91-172 applicable to taxable years beginning after Dec. 31, 1969, see section 121(g) of Pub. L. 91-172, set out as a note under section 511 of this title.
Amendment by section 401(e)(2)-(4) of Pub. L. 91-172 applicable with respect to taxable years ending on or after Dec. 31, 1970, see section 401(h)(3) of Pub. L. 91-172, set out as a note under section 1561 of this title.
EFFECTIVE DATE OF 1967 AMENDMENT
Section 4 of Pub. L. 90-26 provided that: ‘The amendments made by the first three sections of this Act (amending this section and section 167 of this title) shall apply to taxable years ending after March 9, 1967.’
EFFECTIVE DATE OF 1966 AMENDMENTS
Section 201(b) of Pub. L. 89-809, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendments made by subsection (a) (amending this section) shall apply to taxable years ending after December 31, 1965, but only with respect to property placed in service after such date. In applying section 46(b) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (relating to carryback and carryover of unused credits), the amount of any investment credit carryback to any taxable year ending on or before December 31, 1965, shall be determined without regard to the amendments made by this section.'
Amendment by Pub. L. 89-800 applicable to taxable years ending after Oct. 9, 1966, see section 4 of Pub. L. 89-800, set out as a note under section 46 of this title.
EFFECTIVE DATE OF 1964 AMENDMENT
Section 203(a)(4) of Pub. L. 88-272 provided that: ‘Paragraphs (1) (amending this section) and (3) (amending this section and section 1016 of this title and repealing section 181 of this title) of this subsection shall apply -
‘(A) in the case of property placed in service after December 31, 1963, with respect to taxable years ending after such date, and
‘(B) in the case of property placed in service before January 1, 1964, with respect to taxable years beginning after December 31, 1963.’
Section 203(f) of Pub. L. 88-272 provided that:
‘(1) The amendments made by subsection (b) (amending this section) shall apply with respect to property possession of which is transferred to a lessee on or after the date of enactment of this Act (Feb. 26, 1964).
‘(2) The amendments made by subsection (c) (amending this section) shall apply with respect to taxable years ending after June 30, 1963.
‘(3) The amendments made by subsection (d) (amending section 1245 of this title) shall apply with respect to dispositions after December 31, 1963, in taxable years ending after such date.’
EFFECTIVE DATE
Section applicable with respect to taxable years ending after Dec. 31, 1961, see section 2(h) of Pub. L. 87-834, set out as a note under section 46 of this title.
GRANTS FOR SPECIFIED ENERGY PROPERTY IN LIEU OF TAX CREDITS
Sec. 1603 of Pub. L. 111-5, Div. B, as amended by Pub. L. 111-312, Sec. 707, provided that:
“(a) IN GENERAL.—Upon application, the Secretary of the Treasury shall, subject to the requirements of this section, provide a grant to each person who places in service specified energy property to reimburse such person for a portion of the expense of such property as provided in subsection (b). No grant shall be made under this section with respect to any property unless such property—
“(1) is placed in service during 2009, 2010, or 2011, or
“(2) is placed in service after 2011 and before the credit termination date with respect to such property, but only if the construction of such property began during 2009, 2010, or 2011.
“(b) GRANT AMOUNT.—
“(1) IN GENERAL.—The amount of the grant under subsection (a) with respect to any specified energy property shall be the applicable percentage of the basis of such property.
“(2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), the term “applicable percentage” means—
“(A) 30 percent in the case of any property described in paragraphs (1) through (4) of subsection (d), and
“(B) 10 percent in the case of any other property.
“(3) DOLLAR LIMITATIONS.—In the case of property described in paragraph (2), (6), or (7) of subsection (d), the amount of any grant under this section with respect to such property shall not exceed the limitation described in section 48(c)(1)(B), 48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue Code of 1986, respectively, with respect to such property.
“(c) TIME FOR PAYMENT OF GRANT.—The Secretary of the Treasury shall make payment of any grant under subsection (a) during the 60-day period beginning on the later of—
“(1) the date of the application for such grant, or
“(2) the date the specified energy property for which the grant is being made is placed in service.
“(d) SPECIFIED ENERGY PROPERTY.—For purposes of this section, the term “specified energy property” means any of the following:
“(1) QUALIFIED FACILITIES.—Any qualified property (as defined in section 48(a)(5)(D) of the Internal Revenue Code of 1986) which is part of a qualified facility (within the meaning of section 45 of such Code) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code.
“(2) QUALIFIED FUEL CELL PROPERTY.—Any qualified fuel cell property (as defined in section 48(c)(1) of such Code).
“(3) SOLAR PROPERTY.—Any property described in clause (i) or (ii) of section 48(a)(3)(A) of such Code.
“(4) QUALIFIED SMALL WIND ENERGY PROPERTY.—Any qualified small wind energy property (as defined in section 48(c)(4) of such Code).
“(5) GEOTHERMAL PROPERTY.—Any property described in clause (iii) of section 48(a)(3)(A) of such Code.
“(6) QUALIFIED MICROTURBINE PROPERTY.— Any qualified microturbine property (as defined in section 48(c)(2) of such Code).
“(7) COMBINED HEAT AND POWER SYSTEM PROPERTY.—Any combined heat and power system property (as defined in section 48(c)(3) of such Code).
“(8) GEOTHERMAL HEAT PUMP PROPERTY.— Any property described in clause (vii) of section 48(a)(3)(A) of such Code.
“Such term shall not include any property unless depreciation (or amortization in lieu of depreciation) is allowable with respect to such property.
“(e) CREDIT TERMINATION DATE.—For purposes of this section, the term “credit termination date” means—
“(1) in the case of any specified energy property which is part of a facility described in paragraph (1) of section 45(d) of the Internal Revenue Code of 1986, January 1, 2013,
“(2) in the case of any specified energy property which is part of a facility described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code, January 1, 2014, and
“(3) in the case of any specified energy property described in section 48 of such Code, January 1, 2017.
“In the case of any property which is described in paragraph (3) and also in another paragraph of this subsection, paragraph (3) shall apply with respect to such property.
“(f) APPLICATION OF CERTAIN RULES.—In making grants under this section, the Secretary of the Treasury shall apply rules similar to the rules of section 50 of the Internal Revenue Code of 1986. In applying such rules, if the property is disposed of, or otherwise ceases to be specified energy property, the Secretary of the Treasury shall provide for the recapture of the appropriate percentage of the grant amount in such manner as the Secretary of the Treasury determines appropriate.
“(g) EXCEPTION FOR CERTAIN NON-TAXPAYERS.— The Secretary of the Treasury shall not make any grant under this section to—
“(1) any Federal, State, or local government (or any political subdivision, agency, or instrumentality thereof),
“(2) any organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code,
“(3) any entity referred to in paragraph (4) of section 54(j) of such Code, or
“(4) any partnership or other pass-thru entity any partner (or other holder of an equity or profits interest) of which is described in paragraph (1), (2) or (3).
“(h) DEFINITIONS.—Terms used in this section which are also used in section 45 or 48 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 45 or 48. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary's delegate.
“(i) APPROPRIATIONS.—There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section.
“(j) TERMINATION.—The Secretary of the Treasury shall not make any grant to any person under this section unless the application of such person for such grant is received before October 1, 2012.”
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.
TRANSFER OF FUNCTIONS
Functions, powers, and duties of Federal Aviation Agency and of Administrator and other offices and officers thereof transferred by Pub. L. 89-670, Oct. 15, 1966, 80 Stat. 931, to Secretary of Transportation, with functions, powers, and duties of Secretary of Transportation pertaining to aviation safety to be exercised by Federal Aviation Administrator in Department of Transportation, see section 106 of Title 49, Appendix, Transportation.
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.
APPLICABILITY OF CERTAIN AMENDMENTS BY PUB. L. 99-514 IN RELATION TO TREATY OBLIGATIONS OF UNITED STATES
For applicability of amendment by section 701(e)(4)(C) of Pub. L. 99-514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100-647 be treated as if it had been included in the provision of Pub. L. 99-514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100-647, set out as a note under section 861 of this title.
SPECIAL RULE
Section 1879(j)(3) of Pub. L. 99-514 provided that: ‘If refund or credit of any overpayment of tax resulting from the application of this subsection (amending this section) is prevented at any time before the close of the date which is 1 year after the date of the enactment of this Act (Oct. 22, 1986) by operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of the amendments made by this subsection (amending this section)) may, nevertheless, be made or allowed if claim therefor is filed before the close of such 1-year period.’
CLARIFICATION OF EFFECT OF 1984 AMENDMENT ON INVESTMENT TAX CREDIT
For provision that nothing in the amendments made by section 474(o) of Pub. L. 98-369, which amended this section, be construed as reducing the investment tax credit in taxable years beginning before Jan. 1, 1984, see section 475(c) of Pub. L. 98-369, set out as a note under section 46 of this title.
ALTERNATIVE METHODS OF COMPUTING CREDIT FOR PAST PERIODS
Section 804(c) of Pub. L. 94-455, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(1) General rule for determining useful life, predominant foreign use, etc. - In the case of a qualified film (within the meaning of section 48(k)(1)(B) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)) placed in service in a taxable year beginning before January 1, 1975, with respect to which neither an election under paragraph (2) of this subsection nor an election under subsection (e)(2) applies -
‘(A) the applicable percentage under section 46(c)(2) of such Code shall be determined as if the useful life of the film would have expired at the close of the first taxable year by the close of which the aggregate amount allowable as a deduction under section 167 of such Code would equal or exceed 90 percent of the basis of such property (adjusted for any partial dispositions),
‘(B) for purposes of section 46(c)(1) of such Code, the basis of the property shall be determined by taking into account the total production costs (within the meaning of section 48(k)(5)(B) of such Code),
‘(C) for purposes of section 48(a)(2) of such Code, such film shall be considered to be used predominantly outside the United States in the first taxable year for which 50 percent or more of the gross revenues received or accrued during the taxable year from showing the film were received or accrued from showing the film outside the United States, and
‘(D) Section 47(a)(7) of such Code shall apply.
‘(2) Election of 40-percent method.–
‘(A) In general.— A taxpayer may elect to have this paragraph apply to all qualified films placed in service during taxable years beginning before January 1, 1975 (other than films to which an election under subsection (e)(2) of this section applies).
‘(B) Effect of election.— If the taxpayer makes an election under this paragraph, then section 48(k) of the Internal Revenue Code of 1986 shall apply to all qualified films described in subparagraph (A) with the following modifications:
‘(i) subparagraph (B) of paragraph (4) shall not apply, but in determining qualified investment under section 46(c)(1) of such Code there shall be used (in lieu of the basis of such property) an amount equal to 40 percent of the aggregate production costs (within the meaning of paragraph (5)(B) of such section 48(k)),
‘(ii) paragraph (2) shall be applied by substituting ‘100 percent’ for ‘66 2/3 percent’, and
‘(iii) paragraph (3) and paragraph (5) (other than subparagraph (B)) shall not apply.
‘(C) Rules relating to elections. — An election under this paragraph shall be made not later than the day which is 6 months after the date of the enactment of this Act (Oct. 4, 1976) and shall be made in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. Such an election may be revoked only with the consent of the Secretary of the Treasury or his delegate.
‘(D) The taxpayer must consent to join in certain proceedings. — No election may be made under this paragraph or subsection (e)(2) by any taxpayer unless he consents, under regulations prescribed by the Secretary of the Treasury or his delegate, to treat the determination of the investment credit allowable on each film subject to an election as a separate cause of action, and to join in any judicial proceeding for determining the person entitled to, and the amount of, the credit allowable under section 38 of the Internal Revenue Code of 1986 with respect to any film covered by such election.
‘(3) Election to have credit determined in accordance with previous litigation. —
‘(A) In general. — A taxpayer described in subparagraph (B) may elect to have this paragraph apply to all films (whether or not qualified) placed in service in taxable years beginning before January 1, 1975, and with respect to which an election under subsection (e)(2) is not made.
‘(B) Who may elect. — A taxpayer may make an election under this paragraph if he has filed an action in any court of competent jurisdiction, before January 1, 1976, for a determination of such taxpayer's rights to the allowance of a credit against tax under section 38 of the Internal Revenue Code of 1986 for any taxable year beginning before January 1, 1975, with respect to any film.
‘(C) Effect of election. — If the taxpayer makes an election under this paragraph -
‘(i) paragraphs (1) and (2) of this subsection, and subsection (d) shall not apply to any film placed in service by the taxpayer, and
‘(ii) subsection 48(k) of the Internal Revenue Code of 1986 shall not apply to any film placed in service by the taxpayer in any taxable year beginning before January 1, 1975, and with respect to which an election under subsection (e)(2) is not made, and the right of the taxpayer to the allowance of a credit against tax under section 38 of such Code with respect to any film placed in service in any taxable year beginning before January 1, 1975, and as to which an election under subsection (e)(2) is not made, shall be determined as though this section (other than this paragraph) has not been enacted.
‘(D) Rules relating to elections. — An election under this paragraph shall be made not later than the day which is 90 days after the date of the enactment of this Act (Oct. 4, 1976), by filing a notification of such election with the national office of the Internal Revenue Service. Such an election, once made, shall be irrevocable.’
ENTITLEMENT TO CREDIT
Section 804(d) of Pub. L. 94-455, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘Paragraph (1) of section 48(k) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (relating to entitlement to credit) shall apply to any motion picture film or video tape placed in service in any taxable year beginning before January 1, 1975.'
INCREASE IN BASIS OF PROPERTY PLACED IN SERVICE BEFORE JANUARY 1, 1964
Section 203(a)(2) of Pub. L. 88-272, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
‘(A) The basis of any section 38 property (as defined in section 48(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)) placed in service before January 1, 1964, shall be increased, under regulations prescribed by the Secretary of the Treasury or his delegate, by an amount equal to 7 percent of the qualified investment with respect to such property under section 46(c) of the Internal Revenue Code of 1986. If there has been any increase with respect to such property under section 48(g)(2) of such Code, the increase under the preceding sentence shall be appropriately reduced therefor.
‘(B) If a lessor made the election provided by section 48(d) of the Internal Revenue Code of 1986 with respect to property placed in service before January 1, 1964 —
‘(i) subparagraph (A) shall not apply with respect to such property, but
‘(ii) under regulations prescribed by the Secretary of the Treasury or his delegate, the deductions otherwise allowable under section 162 of such Code to the lessee for amounts paid to the lessor under the lease (or, if such lessee has purchased such property, the basis of such property) shall be adjusted in a manner consistent with subparagraph (A).
‘(C) The adjustments under this paragraph shall be made as of the first day of the taxpayer's first taxable year which begins after December 31, 1963.'