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, 2024,
I.R.C. § 48(a)(2)(A)(i)(III) —
energy property described in paragraph (3)(A)(ii),
I.R.C. § 48(a)(2)(A)(i)(IV) —
qualified small wind energy property, and
I.R.C. § 48(a)(2)(A)(i)(V) —
waste energy recovery 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, 2024,
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,
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, 2024, or
I.R.C. § 48(a)(3)(A)(viii) —
waste energy recovery property,
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, 2022, 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
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, and
I.R.C. § 48(a)(5)(E)(iv) —
in the case of any facility the construction of which begins after December 31, 2019,
and before January 1, 2022, 40 percent.
I.R.C. § 48(a)(5)(F) Qualified Offshore Wind Facilities
I.R.C. § 48(a)(5)(F)(i) In General —
In the case of any qualified offshore wind facility—
I.R.C. § 48(a)(5)(F)(i)(I) —
subparagraph (C)(ii) shall be applied by substituting “January 1, 2026” for “January
1, 2022”,
I.R.C. § 48(a)(5)(F)(i)(II) —
subparagraph (E) shall not apply, and
I.R.C. § 48(a)(5)(F)(i)(III) —
for purposes of this paragraph, section 45(d)(1) shall be applied by substituting “January 1, 2026” for “January 1, 2022”.
I.R.C. § 48(a)(5)(F)(ii) Qualified Offshore Wind Facility —
For purposes of this subparagraph, the term “qualified offshore wind facility” means
a qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) (determined without regard to any date by which the construction of the facility
is required to begin) which is located in the inland navigable waters of the United
States or in the coastal waters of the United States.
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, 2024, 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, 2023, 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, 2022,
and before January 1, 2024, 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, 2024, and which is not placed
in service before January 1, 2026, the energy percentage determined under paragraph
(2) shall be equal to 10 percent.
I.R.C. § 48(a)(7) Phaseout For Certain Other 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, waste energy recovery 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, 2023, 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, 2022,
and before January 1, 2024, 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, 2026, 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, 2024.
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, 2024.
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, 2024.
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, 2024.
I.R.C. § 48(c)(5) Waste Energy Recovery Property
I.R.C. § 48(c)(5)(A) In General —
The term “waste energy recovery property”
means property that generates electricity solely from heat from buildings or equipment
if the primary purpose of such building or equipment is not the generation of electricity.
I.R.C. § 48(c)(5)(B) Capacity Limitation —
The term “waste energy recovery property”
shall not include any property which has a capacity in excess of 50 megawatts.
I.R.C. § 48(c)(5)(C) No Double Benefit —
Any waste energy recovery property (determined without regard to this subparagraph)
which is part of a system which is a combined heat and power system property shall
not be treated as waste energy recovery property for purposes of this section unless
the taxpayer elects to not treat such system as a combined heat and power system property
for purposes of this section.
I.R.C. § 48(c)(5)(D) Termination —
—The term “waste energy recovery property“
shall not include any property the construction of which does not begin before January
1, 2024.
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; Pub. L. 116-94, Div. Q, Sec. 127(b), (c)(2)(B), Dec. 20, 2019; Pub. L. 116-260, Div. EE, title I, Sec. 131(b), (c)(2), 132, title II, Sec. 203, 204, Dec. 27, 2020,
134 Stat. 1182.)
BACKGROUND NOTES
AMENDMENTS
2020 — Subsec. (a)(2)(A)(i)(II). Pub. L. 116-260, Div. EE, Sec. 132(a)(1)(A), amended subclause (II) by substituting “January 1, 2024”
for “January 1, 2022”.
Subsec. (a)(2)(A)(i)(III), (V). Pub. L. 116-260, Div. EE, Sec. 203(b), amended clause (i) by striking “and” at the end of subclause
(III) and by adding subclause (V).
Subsec. (a)(3)(A)(ii). Pub. L. 116-260, Div. EE, Sec. 132(a)(1)(B)(i), amended clause
(ii) by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (a)(3)(A)(vii). Pub. L. 116-260, Div. EE, Sec. 132(a)(1)(B)(ii), amended clause
(vii) by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (a)(3)(A)(vi)-(viii). Pub. L. 116-260, Div. EE, Sec. 203(a), amended subpar. (A) by striking “or” at the end of clause
(vi), by inserting “or” at the end of clause (vii), and by adding clause (viii).
Subsec. (a)(5)(C)(ii). Pub. L. 116-260, Div. EE, Sec. 131(b), amended clause (ii) by substituting “January 1, 2022” for
“January 1, 2021”.
Subsec. (a)(5)(E)(iv). Pub. L. 116-260, Div. EE, Sec. 131(c)(2), amended clause (iv)
by substituting “January 1, 2022” for “January 1, 2021”.
Subsec. (a)(5)(F). Pub. L. 116-260, Div. EE, Sec. 204(a), amended par. (5) by adding subpar. (F).
Subsec. (a)(6)(A). Pub. L. 116-260, Div. EE, Sec. 132(b)(1)(A)(i), amended subpar.
(A) by substituting “January 1, 2024, the energy percentage”
for “January 1, 2022, the energy percentage”.
Subsec. (a)(6)(A)(i). Pub. L. 116-260, Div. EE, Sec. 132(b)(1)(A)(ii), amended clause
(i) by substituting “January 1, 2023” for “January 1, 2021”.
Subsec. (a)(6)(A)(ii). Pub. L. 116-260, Div. EE, Sec. 132(b)(1)(A)(iii), amended clause
(ii) by substituting “after December 31, 2022, and before January 1, 2024” for “after
December 31, 2020, and before January 1, 2022”.
Subsec. (a)(6)(B). Pub. L. 116-260, Div. EE, Sec. 132(b)(1)(B), amended subpar.
(B) by substituting “begins before January 1, 2024, and which is not placed in service
before January 1, 2026” for “begins before January 1, 2022, and which is not placed
in service before January 1, 2024”.
Subsec. (a)(7). Pub. L. 116-260, Div. EE, Sec. 203(c), amended par. (7) by inserting “waste energy recovery property,’’
after ‘‘qualified small wind property,’’ and by substituting “CERTAIN OTHER” for “FIBER-OPTIC
SOLAR, QUALIFIED FUEL CELL, AND QUALIFIED SMALL WIND” in the heading.
Subsec. (a)(7)(A)(i). Pub. L. 116-260, Div. EE, Sec. 132(b)(2)(A)(i), amended clause
(i) by substituting “January 1, 2023” for “January 1, 2021”.
Subsec. (a)(7)(A)(ii). Pub. L. 116-260, Div. EE, Sec. 132(b)(2)(A)(ii), amended clause
(ii) by substituting “after December 31, 2022, and before January 1, 2024” for “after
December 31, 2020, and before January 1, 2022”.
Subsec. (a)(7)(B). Pub. L. 116-260, Div. EE, Sec. 132(b)(2)(B), amended subpar.
(B) by substituting “January 1, 2026” for “January 1, 2024”.
Subsec. (c)(1)(D). Pub. L. 116-260, Div. EE, Sec. 132(a)(2)(A), amended subpar.
(D) by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (c)(2)(D). Pub. L. 116-260, Div. EE, Sec. 132(a)(2)(B), amended subpar.
(D) by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (c)(3)(A)(iv). Pub. L. 116-260, Div. EE, Sec. 132(a)(2)(C), amended clause (iv)
by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (c)(4)(C). Pub. L. 116-260, Div. EE, Sec. 132(a)(2)(D), amended subpar (C)
by substituting “January 1, 2024” for “January 1, 2022”.
Subsec. (c)(5). Pub. L. 116-260, Div. EE, Sec. 203(d), amended subsec. (c) by adding par. (5).
2019 — Subsec. (a)(5)(C)(ii). Pub. L. 116-94, Div. Q, Sec. 127(b), amended clause (ii) by substituting “January 1, 2021” for “January
1, 2018 (January 1, 2020, in the case of any facility which is described in paragraph
(1) of section 45(d))”.
Subsec. (a)(5)(E). Pub. L. 116-94, Div. Q, Sec. 127(c)(2)(B), amended by striking “and”
at the end of clause (ii), and substituting “, and” for the period at the end of clause
(iii), and adding new clause (iv).
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).
1991 — Pub. 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 2020 AMENDMENTS
Amendments by Pub. L. 116-260, Div. EE, Sec. 131, effective on January 1, 2021.
Amendments by Pub. L. 116-260, Div. EE, Sec. 132, effective on January 1, 2020.
Amendments by Pub. L. 116-260, Div. EE, Sec. 203, effective for periods after December 31, 2020, 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.
Amendment by Pub. L. 116-260, Div. EE, Sec. 204, 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).
EFFECTIVE DATE OF 2019 AMENDMENTS
Amendments by Pub. L. 116-94, Div. Q, Sec. 127(b), (c)(2)(B), effective on January 1, 2018.
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 Codeof 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 Codeof 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 Codeof 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.'