Amended 1981, 2010, 2013, 2014, 2015, 2017, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(b)(15)(A), redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to special rules for qualified disaster assistance property.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(b)(2), amended subsec. (f) generally. Prior to amendment, subsec. (f) consisted of pars. (1) and (2) defining “section 179 property” and “qualified real property”, respectively.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(2)(A), struck out “beginning after 2009 and before 2016” after “any taxable year” in introductory provisions.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(1)(A), substituted “2016” for “2015” in introductory provisions.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(2)(B), struck out par. (3). Text read as follows: “For purposes of applying the limitation under subsection (b)(1)(B), not more than $250,000 of the aggregate cost which is taken into account under subsection (a) for any taxable year may be attributable to qualified real property.”
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(2)(B), struck out par. (4) which related to limitation of carryover of amounts attributable to qualified real property.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(1)(B), substituted “2015” for “2014” wherever appearing.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(c)(1)(C), substituted “2013, and 2014” for “and 2013” in heading.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(d)(1), substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013” in introductory provisions.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(d)(2)(A), substituted “2014” for “2013” wherever appearing.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(d)(2)(B), substituted “2011, 2012, and 2013” for “2011 and 2012” in heading.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(d)(1), substituted “2010, 2011, 2012, or 2013” for “2010 or 2011” in introductory provisions.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(d)(2)(A), substituted “2013” for “2011”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(d)(2)(B), substituted “2010, 2011 and 2012” for “2010” in heading and inserted at end “For the last taxable year beginning in 2013, the amount determined under subsection (b)(3)(A) for such taxable year shall be determined without regard to this paragraph.”
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(d)(2)(A), substituted “2013” for “2011” in two places.
- 2010 Pub. L. 111-240 Pub. L. 111–240, § 2021(b), added subsec. (f).
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 737(b)(3)(A), struck out “(without regard to the dates specified in subparagraph (A)(i) thereof)” after “section 168(e)(7)”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 737(b)(3)(B), struck out “(without regard to subparagraph (E) thereof)” after “section 168(e)(8)”.
- 1981 Pub. L. 97-34 Pub. L. 97–34 amended section generally, changing its content from provisions that formerly made available an additional first-year depreciation allowance for small businesses to provisions allowing a taxpayer to elect to treat the cost of section 179 property as an expense which is not chargeable to capital account, with any cost so treated to be allowed as a deduction for the taxable year in which the section 179 property is placed in service.
Cases: Sharon v. Commissioner, 66 T.C. 515 (1976); Siegel v. Commissioner, 78 T.C. 659 (1982); Kimmelman v. Commissioner, 72 T.C. 294 (1979)
Final rules 4
(a) Treatment as expenses A taxpayer may elect to treat the cost of any section 179 property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the section 179 property is placed in service.
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(b) Limitations
Amended 1986, 2008, 2009, 2010
- 2010 Pub. L. 111-147 Pub. L. 111–147, § 201(a)(3), struck out par. (7) which related to increase in limitations for 2008 and 2009.
- 2009 Pub. L. 111-5 Pub. L. 111–5 substituted “2008, and 2009” for “2008” in heading and “2008, or 2009” for “2008” in introductory provisions.
- 2008 Pub. L. 110-185 Pub. L. 110–185 added par. (7).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 202(a), in amending subsec. (b) generally, substituted “Limitations” for “Dollar limitation” in heading, in par. (1) substituted as heading “Dollar limitation” for “In general” and in text “shall not exceed $10,000” for “shall not exceed the following applicable amount:” and a table specifying amounts for specific years, added pars. (2) to (4), and struck out former par. (2) which read as follows: “In the case of a husband and wife filing separate returns for a taxable year, the applicable amount under paragraph (1) shall be equal to 50 percent of the amount otherwise determined under paragraph (1).”
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(1) Dollar limitation The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $2,500,000.
Amended 1984, 1993, 1996, 2003, 2004, 2006, 2007, 2010, 2013, 2014, 2015, 2017, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70306(a)(1), substituted “$2,500,000” for “$1,000,000”.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(1), substituted “$1,000,000” for “$500,000”.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(a)(1), substituted “shall not exceed $500,000.” for “shall not exceed—
“(A) $250,000 in the case of taxable years beginning after 2007 and before 2010,
“(B) $500,000 in the case of taxable years beginning after 2009 and before 2015, and
“(C) $25,000 in the case of taxable years beginning after 2014.”
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(a)(1)(A), substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(a)(1)(B), substituted “2014” for “2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(a)(1)(A), substituted “2010, 2011, 2012, or 2013, and” for “2010 or 2011,”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(a)(1)(B)–(D), redesignated subpar. (D) as (C), substituted “2013” for “2012”, and struck out former subpar. (C) which read as follows: “$125,000 in the case of taxable years beginning in 2012, and”.
- 2010 Pub. L. 111-240 Pub. L. 111–240, § 2021(a)(1), substituted “shall not exceed—” for “shall not exceed $25,000 ($250,000 in the case of taxable years beginning after 2007 and before 2011).” and added subpars. (A) to (C).
- 2010 Pub. L. 111-147 Pub. L. 111–147, § 201(a)(1), substituted “($250,000 in the case of taxable years beginning after 2007 and before 2011)” for “($125,000 in the case of taxable years beginning after 2006 and before 2011)”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 402(a), added subpars. (C) and (D) and struck out former subpar. (C), which read as follows: “$25,000 in the case of taxable years beginning after 2011.”
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(a), (b)(1), substituted “$125,000 in the case of taxable years beginning after 2006” for “$100,000 in the case of taxable years beginning after 2002” and “2011” for “2010”.
- 2006 Pub. L. 109-222 Pub. L. 109–222 substituted “2010” for “2008”.
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 201, substituted “2008” for “2006”.
- 2003 Pub. L. 108-27 Pub. L. 108–27, § 202(a), reenacted heading without change and amended text generally. Prior to amendment, par. (1) contained a table specifying the maximum amounts for taxable years 1997 to 2003 and thereafter which could be taken into account as the aggregate costs under subsec. (a).
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1111(a), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $17,500.”
- 1993 Pub. L. 103-66 Pub. L. 103–66 substituted “$17,500” for “$10,000”.
- 1984 Pub. L. 98-369 Pub. L. 98–369 amended table by dropping items setting applicable amounts of $0 for 1981 and $5,000 for 1982, substituting an applicable amount of $5,000 for 1983, 1984, 1985, 1986, and 1987 for former table items which had set applicable amounts of $5,000 for 1983, $7,500 for 1984, $7,500 for 1985, and $10,000 for 1986 or thereafter, and added items setting applicable amounts of $7,500 for 1988 or 1989, and $10,000 for 1990 or thereafter.
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(2) Reduction in limitation The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds $4,000,000.
Amended 2003, 2004, 2006, 2007, 2010, 2013, 2014, 2015, 2017, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70306(a)(2), substituted “$4,000,000” for “$2,500,000”.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(2), substituted “$2,500,000” for “$2,000,000”.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(a)(2), substituted “exceeds $2,000,000.” for “exceeds—
“(A) $800,000 in the case of taxable years beginning after 2007 and before 2010,
“(B) $2,000,000 in the case of taxable years beginning after 2009 and before 2015, and
“(C) $200,000 in the case of taxable years beginning after 2014.”
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(a)(2)(A), substituted “beginning after 2009 and before 2015” for “beginning in 2010, 2011, 2012, or 2013”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(a)(2)(B), substituted “2014” for “2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(a)(2)(A), substituted “2010, 2011, 2012, or 2013, and” for “2010 or 2011,”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(a)(2)(B)–(D), redesignated subpar. (D) as (C), substituted “2013” for “2012”, and struck out former subpar. (C) which read as follows: “$500,000 in the case of taxable years beginning in 2012, and”.
- 2010 Pub. L. 111-240 Pub. L. 111–240, § 2021(a)(2), substituted “exceeds—” for “exceeds $200,000 ($800,000 in the case of taxable years beginning after 2007 and before 2011).” and added subpars. (A) to (C).
- 2010 Pub. L. 111-147 Pub. L. 111–147, § 201(a)(2), substituted “($800,000 in the case of taxable years beginning after 2007 and before 2011)” for “($500,000 in the case of taxable years beginning after 2006 and before 2011)”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 402(b), added subpars. (C) and (D) and struck out former subpar. (C), which read as follows: “$200,000 in the case of taxable years beginning after 2011.”
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(a), (b)(2), substituted “$500,000 in the case of taxable years beginning after 2006” for “$400,000 in the case of taxable years beginning after 2002” and “2011” for “2010”.
- 2006 Pub. L. 109-222 Pub. L. 109–222 substituted “2010” for “2008”.
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 201, substituted “2008” for “2006”.
- 2003 Pub. L. 108-27 Pub. L. 108–27, § 202(b), inserted “($400,000 in the case of taxable years beginning after 2002 and before 2006)” after “$200,000”.
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(3) Limitation based on income from trade or business
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1002(b)(1), amended par. (3) generally. Prior to amendment, par. (3) read as follows:
- 1988 “(A) In general.—The aggregate cost of section 179 property taken into account under subsection (a) for any taxable year shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year.
- 1988 “(B) Carryover of unused cost.—The amount of any cost which (but for subparagraph (A)) would have been allowed as a deduction under subsection (a) for any taxable year shall be carried to the succeeding taxable year and added to the amount allowable as a deduction under subsection (a) for such succeeding taxable year.
- 1988 “(C) Computation of taxable income.—For purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the cost of any section 179 property.”
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(A) In general The amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year.
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(B) Carryover of disallowed deduction The amount allowable as a deduction under subsection (a) for any taxable year shall be increased by the lesser of—
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(i) the aggregate amount disallowed under subparagraph (A) for all prior taxable years (to the extent not previously allowed as a deduction by reason of this subparagraph), or
(ii) the excess (if any) of—
(I) the limitation of paragraphs (1) and (2) (or if lesser, the aggregate amount of taxable income referred to in subparagraph (A)), over
(II) the amount allowable as a deduction under subsection (a) for such taxable year without regard to this subparagraph.
(C) Computation of taxable income For purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the deduction allowable under this section.
(4) Married individuals filing separately In the case of a husband and wife filing separate returns for the taxable year—
(A) such individuals shall be treated as 1 taxpayer for purposes of paragraphs (1) and (2), and
(B) unless such individuals elect otherwise, 50 percent of the cost which may be taken into account under subsection (a) for such taxable year (before application of paragraph (3)) shall be allocated to each such individual.
(5) Limitation on cost taken into account for certain passenger vehicles
Amended 2003, 2010
- 2010 Pub. L. 111-147 Pub. L. 111–147, § 201(a)(3), (4), redesignated par. (6) as (5) and struck out former par. (5) which related to inflation adjustments.
- 2003 Pub. L. 108-27 Pub. L. 108–27, § 202(d), added par. (5).
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(A) In general The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000.
Amended 2004, 2006, 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(a), (c)(1), (2), in introductory provisions, substituted “2007” for “2003”, “2011” for “2010”, and “$125,000 and $500,000” for “$100,000 and $400,000”.
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(c)(3), substituted “2006” for “2002”.
- 2006 Pub. L. 109-222 Pub. L. 109–222 substituted “2010” for “2008”.
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 201, substituted “2008” for “2006”.
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(B) Sport utility vehicle For purposes of subparagraph (A)—
(i) In general The term “sport utility vehicle” means any 4-wheeled vehicle—
(I) which is primarily designed or which can be used to carry passengers over public streets, roads, or highways (except any vehicle operated exclusively on a rail or rails),
(II) which is not subject to section 280F, and
(III) which is rated at not more than 14,000 pounds gross vehicle weight.
(ii) Certain vehicles excluded Such term does not include any vehicle which—
(I) is designed to have a seating capacity of more than 9 persons behind the driver’s seat,
(II) is equipped with a cargo area of at least 6 feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or
(III) has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver’s seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.
(6) Inflation adjustment
Amended 2004, 2010, 2013, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(f), added par. (6).
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(a)(3), struck out par. (6) which related to inflation adjustment.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 402(c), added par. (6).
- 2010 Pub. L. 111-147 Pub. L. 111–147, § 201(a)(4), redesignated par. (6) as (5).
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 910(a), added par. (6).
(A) In general In the case of any taxable year beginning after 2018 (2025 in the case of the dollar amounts in paragraphs (1) and (2)), the dollar amounts in paragraphs (1), (2), and (5)(A) shall each be increased by an amount equal to—
Amended 2017, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70306(b)(1), inserted “(2025 in the case of the dollar amounts in paragraphs (1) and (2))” after “In the case of any taxable year beginning after 2018” in introductory provisions.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(3)(B)(i), substituted “paragraphs (1), (2), and (5)(A)” for “paragraphs (1) and (2)” in introductory provisions.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(3)(A)(i), substituted “2018” for “2015” in introductory provisions.
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(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof—
Amended 2017, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70306(b)(2), substituted “determined by substituting in subparagraph (A)(ii) thereof—” for “determined by substituting ‘calendar year 2017’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” and added subcls. (I) and (II).
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(3)(A)(ii), substituted “calendar year 2017” for “calendar year 2014”.
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 11002(d)(1)(R), substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
(I) in the case of amounts in paragraphs (1) and (2), “calendar year 2024” for “calendar year 2016”, and
(II) in the case of the amount in paragraph (5)(A), “calendar year 2017” for “calendar year 2016”.
(B) Rounding The amount of any increase under subparagraph (A) shall be rounded to the nearest multiple of $10,000 ($100 in the case of any increase in the amount under paragraph (5)(A)).
Amended 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(a)(3)(B)(ii), inserted “($100 in the case of any increase in the amount under paragraph (5)(A))” after “$10,000”.
(c) Election
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(1) In general An election under this section for any taxable year shall—
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
(A) specify the items of section 179 property to which the election applies and the portion of the cost of each of such items which is to be taken into account under subsection (a), and
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(B) be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year.
Such election shall be made in such manner as the Secretary may by regulations prescribe.
(2) Election Any election made under this section, and any specification contained in any such election, may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.
Amended 1976, 2003, 2004, 2006, 2007, 2010, 2013, 2014, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(d), struck out “irrevocable” after “Election” in heading and “may not be revoked except with the consent of the Secretary. Any such election or specification with respect to any taxable year beginning after 2002 and before 2015” after “such election,” in text.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(c), substituted “2015” for “2014”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(c), substituted “2014” for “2013”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 402(e), substituted “2013” for “2012”.
- 2010 Pub. L. 111-240 Pub. L. 111–240, § 2021(c), substituted “2012” for “2011”.
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(a), substituted “2011” for “2010”.
- 2006 Pub. L. 109-222 Pub. L. 109–222 substituted “2010” for “2008”.
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 201, substituted “2008” for “2006”.
- 2003 Pub. L. 108-27 Pub. L. 108–27, § 202(e), inserted at end “Any such election or specification with respect to any taxable year beginning after 2002 and before 2006 may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable.”
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(d) Definitions and special rules
Amended 1969
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted reference to component members of a controlled group for reference to members of an affiliated group in pars. (2)(B) and (b), and substituted definition of controlled group for definition of affiliated group in par. (7).
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(1) Section 179 property For purposes of this section, the term “section 179 property” means property—
Amended 1986, 1988, 1990, 1996, 2003, 2015, 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(c), inserted “(other than paragraph (2) thereof)” after “section 50(b)” in concluding provisions.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(e), struck out “and shall not include air conditioning or heating units” after “section 50(b)” in concluding provisions.
- 2003 Pub. L. 108-27 Pub. L. 108–27, § 202(c), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘section 179 property’ means any tangible property (to which section 168 applies) which is section 1245 property (as defined in section 1245(a)(3)) and which is acquired by purchase for use in the active conduct of a trade or business. Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.”
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1702(h)(10), struck out “in” before “a trade or business”.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1702(h)(19), inserted at end “Such term shall not include any property described in section 50(b) and shall not include air conditioning or heating units.”
- 1990 Pub. L. 101-508 Pub. L. 101–508, § 11813(b)(11)(A), substituted “section 1245 property (as defined in section 1245(a)(3))” for “section 38 property”.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1002(a)(19), substituted “tangible property (to which section 168 applies)” for “recovery property”.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 202(b), inserted “in the active conduct of”.
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(A) which is—
(i) tangible property (to which section 168 applies), or
(ii) computer software (as defined in section 197(e)(3)(B)) which is described in section 197(e)(3)(A)(i) and to which section 167 applies,
Amended 2004, 2006, 2007, 2010, 2013, 2014, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 124(b), substituted “and to which section 167 applies” for “, to which section 167 applies, and which is placed in service in a taxable year beginning after 2002 and before 2015”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 127(b), substituted “2015” for “2014”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 315(b), substituted “2014” for “2013”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 402(d), substituted “2013” for “2012”.
- 2010 Pub. L. 111-240 Pub. L. 111–240, § 2021(d), substituted “2012” for “2011”.
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8212(a), substituted “2011” for “2010”.
- 2006 Pub. L. 109-222 Pub. L. 109–222 substituted “2010” for “2008”.
- 2004 Pub. L. 108-357 Pub. L. 108–357, § 201, substituted “2008” for “2006”.
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(B) which is—
(i) section 1245 property (as defined in section 1245(a)(3)), or
(ii) at the election of the taxpayer, qualified real property (as defined in subsection (e)), and
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(b)(15)(B), substituted “subsection (e)” for “subsection (f)”.
Amended 2017
- 2017 Pub. L. 115-97 Pub. L. 115–97, § 13101(b)(1), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “which is section 1245 property (as defined in section 1245(a)(3)), and”.
(C) which is acquired by purchase for use in the active conduct of a trade or business.
Such term shall not include any property described in section 50(b) (other than paragraph (2) thereof).
(2) Purchase defined For purposes of paragraph (1), the term “purchase” means any acquisition of property, but only if—
(A) the property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants),
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(B) the property is not acquired by one component member of a controlled group from another component member of the same controlled group, and
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(C) the basis of the property in the hands of the person acquiring it is not determined—
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(i) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or
(ii) under section 1014(a) (relating to property acquired from a decedent).
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(3) Cost For purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring such property.
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(4) Section not to apply to estates and trusts This section shall not apply to estates and trusts.
(5) Section not to apply to certain noncorporate lessors This section shall not apply to any section 179 property which is purchased by a person who is not a corporation and with respect to which such person is the lessor unless—
(A) the property subject to the lease has been manufactured or produced by the lessor, or
(B) the term of the lease (taking into account options to renew) is less than 50 percent of the class life of the property (as defined in section 168(i)(1)), and for the period consisting of the first 12 months after the date on which the property is transferred to the lessee the sum of the deductions with respect to such property which are allowable to the lessor solely by reason of section 162 (other than rents and reimbursed amounts with respect to such property) exceeds 15 percent of the rental income produced by such property.
Amended 1962, 1990
- 1990 Pub. L. 101-508 Pub. L. 101–508, § 11813(b)(11)(B), amended par. (5) generally. Prior to amendment, par. (5) read as follows: “This section shall not apply to any section 179 property purchased by any person described in section 46(e)(3) unless the credit under section 38 is allowable with respect to such person for such property (determined without regard to this section).”
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 13(c)(2)(A), substituted “section 167(h)” for “section 167(g)”.
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(6) Dollar limitation of controlled group For purposes of subsection (b) of this section—
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(A) all component members of a controlled group shall be treated as one taxpayer, and
(B) the Secretary shall apportion the dollar limitation contained in subsection (b)(1) among the component members of such controlled group in such manner as he shall by regulations prescribe.
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
(7) Controlled group defined For purposes of paragraphs (2) and (6), the term “controlled group” has the meaning assigned to it by section 1563(a), except that, for such purposes, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1).
(8) Treatment of partnerships and S corporations In the case of a partnership, the limitations of subsection (b) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders.
Amended 1962, 1976, 1982, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 201(d)(3), substituted “Treatment of” for “Dollar limitation in case of” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of a partnership, the dollar limitation contained in subsection (b)(1) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders.”
- 1982 Pub. L. 97-354 Pub. L. 97–354 substituted “partnerships and S corporations” for “partnerships” in heading, and inserted “A similar rule shall apply in the case of an S corporation and its shareholders.”
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 213(a), added par. (8) and redesignated former par. (8) as par. (9).
- 1962 Pub. L. 87-834 Pub. L. 87–834, § 13(c)(2)(B), substituted “section 167(g)” for “section 167(f)”.
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(9) Coordination with section 38 No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a).
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 213(a), added par. (8) and redesignated former par. (8) as par. (9).
(10) Recapture in certain cases The Secretary shall, by regulations, provide for recapturing the benefit under any deduction allowable under subsection (a) with respect to any property which is not used predominantly in a trade or business at any time.
Amended 1983, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 202(c), struck out “before the close of the second taxable year following the taxable year in which it is placed in service by the taxpayer” after “at any time”.
- 1983 Pub. L. 97-448 Pub. L. 97–448 added par. (10).
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(e) Qualified real property For purposes of this section, the term “qualified real property” means—
Amended 1976, 2008, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(b)(15)(A), redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to special rules for qualified disaster assistance property.
- 2008 Pub. L. 110-343 Pub. L. 110–343 added subsec. (e).
- 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
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(1) any qualified improvement property described in section 168(e)(6), and