Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 201(d)(2)(A), in amending section generally, substituted provision relating to amortization of cost of acquiring a lease, subsec. (a) setting out a general rule and subsec. (b) excluding certain periods, for former provision for depreciation or amortization of improvements made by lessee on lessor’s property, subsec. (a) setting out a general rule, subsec. (b), in case of related lessee and lessor, setting out a general rule in par. (1) and defining related persons in par. (2), and subsec. (c) setting out a reasonable certainty test.
Cases: Buddy Schoellkopf Products, Inc. v. Commissioner, 65 T.C. 640 (1975); Uecker v. Commissioner, 81 T.C. 983 (1983); Gulf Tel. Corp. v. Commissioner, 52 T.C. 1038 (1969)
Final rules 1
(a) General rule In determining the amount of the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization in respect of any cost of acquiring the lease, the term of the lease shall be treated as including all renewal options (and any other period for which the parties reasonably expect the lease to be renewed) if less than 75 percent of such cost is attributable to the period of the term of the lease remaining on the date of its acquisition.
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647 substituted “the deduction allowable to a lessee for exhaustion, wear and tear, obsolescence, or amortization” for “the deduction allowable to a lessee of a lease for any taxable year for amortization under section 167, 169, 179, 185, 190, 193, or 194”.
Cited by 8
(b) Certain periods excluded For purposes of subsection (a), in determining the period of the term of the lease remaining on the date of acquisition, there shall not be taken into account any period for which the lease may subsequently be renewed, extended, or continued pursuant to an option exercisable by the lessee.
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1812(c)(4)(B), inserted before the period “and subsection (f)(1)(A) of such section shall not apply”.