,,ii #aae? ,,congress #a/ ,session ,s4 #aadd ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,may #ag1 #bjag ,mr4 ,?une 7= himself & ,mr4 ,rob]ts7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to enc\rage bus9ess creation by all[+ fa/] recov]y ( />t-up & organizational exp5ses1 to simplify acc\nt+ me?ods = small bus9esses1 to exp& exp5s+ & provide accel]at$ co/ recov]y to enc\rage inve/m5t 9 new plants & equipm5t1 & = o!r purposes4 #a4 ,%ort title2 am5dm5t ( #aihf ,code2 table ( cont5ts 7a7 ,%ort title ,?is ,act may be cit$ z ! ,inve/m5t 9 ,new ,v5tures & ,economic ,success ,today ,act ( #bjag or ! ,,inve/ ,act ( #bjag4 7b7 ,am5dm5t ( #aihf ,code ,except z o!rwise expressly provid$1 :5ev] 9 ?is ,act an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 7c7 ,table ( cont5ts ,sec4 #a4 ,%ort title2 am5dm5t ( #aihf ,code2 table ( cont5ts4 ,,title ,i--,/>t-up & organizational bus9ess exp5ses ,sec4 #aja4 ,unification & expansion ( d$uction = />t-up & organizational exp5ditures4 ,,title ,,ii--,acc\nt+ me?ods ,sec4 #bja4 ,modifications ( gross receipts te/ = use ( ca% me?od ( acc\nt+ by corporations & p>tn]%ips4 ,sec4 #bjb4 ,cl>ification ( inv5tory acc\nt+ rules = small bus9esses4 ,sec4 #bjc4 ,modification ( rules = capitalization & inclusion 9 inv5tory co/s ( c]ta9 exp5ses4 ,sec4 #bjd4 ,increase 9 gross receipts te/ = con/ruction contract exception to p]c5tage ( completion me?od4 ,,title ,,iii--,modifications ( exp5s+ & co/ recov]y rules ,subtitle ,a--,exp5s+ rules ,sec4 #cja4 ,modifications ( rules = exp5s+ depreciable bus9ess assets4 ,subtitle ,b--,co/ recov]y rules ,sec4 #caa4 #ej-p]c5t exp5s+ made p]man5t4 ,sec4 #cab4 ,modifications ( treatm5t ( c]ta9 f>m prop]ty4 ,sec4 #cac4 ,secret>ial requirem5t to reexam9e economic depreciation = classes ( depreciable prop]ty4 ,sec4 #cad4 ,modifications to depreciation limitations on luxury automobiles & p]sonal use prop]ty4 ,sec4 #cae4 ,r$uction 9 amortization p]iod = intangibles4 ,i ,/>t-up & organizational bus9ess exp5ses #aja4 ,unification & expansion ( d$uction = />t-up & organizational exp5ditures 7a7 ,unification 7#a7 ,9 g5]al ,subsection 7a7 ( section #aie is am5d$ by ins]t+ & organizational aft] />t-up4 7#b7 ,organizational exp5ditures ,subsection 7c7 ( section #aie is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#c7 ,organizational exp5ditures ,! t]m organizational exp5ditures means any exp5diture :i*-- 7,a7 is incid5t to ! creation ( a corporation or a p>tn]%ip1 7,b7 is *>geable to capital acc\nt1 & 7,c7 is ( a "* :i*1 if exp5d$ incid5t to ! creation ( a corporation or a p>tn]%ip hav+ an asc]ta9able life1 w\ld be amortizable ov] su* life4 4 7#c7 ,con=m+ am5dm5t ,section #aie7;b77#a7 is am5d$ by ins]t+ or organizational aft] />t-up ea* place x appe>s4 7b7 ,doll> am\nts & amortization p]iod 7#a7 ,doll> am\nts 7,a7 ,increase ,clause 7ii7 ( section #aie7;b77#a77;,a7 is am5d$-- 7i7 by /rik+ #e1jjj & ins]t+ #ej1jjj1 & 7ii7 by /rik+ #ej1jjj & ins]t+ #ajj1jjj4 7,b7 ,adju/m5t = inflation ,p>agraph 7#c7 ( section #aie7;b7 is am5d$ to read z foll[s3 7#c7 ,adju/m5t = inflation ,9 ! case ( any taxable ye> beg9n+ aft] ,decemb] #ca1 #bjah1 ! #ej1jjj & #ajj1jjj am\nts 9 p>agraph 7#a77;,a77ii7 %all ea* be increas$ by an am\nt equal to-- 7,a7 su* doll> am\nt1 multipli$ by 7,b7 ! co/-(-liv+ adju/m5t det]m9$ "u section #a7;f77#c7 = ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 by sub/itut+ cal5d> ye> #bjag = cal5d> ye> #aiib 9 subp>agraph 7,b7 !re(4 ,if any am\nt z increas$ "u ! prec$+ s5t5ce is n a multiple ( #a1jjj1 su* am\nt %all be r\nd$ to ! ne>e/ multiple ( #a1jjj4 4 7#b7 ,amortization p]iod ,subp>agraph 7,b7 ( section #aie7;b77#a7 is am5d$ by /rik+ #ahj-mon? p]iod & ins]t+ #abj-mon? p]iod4 7#c7 ,allocation ( limit to initial />t-up & organizational exp5ditures ,section #aie7;b7 is am5d$-- 7,a7 by /rik+ ,if 9 p>agraph 7#a7 & ins]t+ ,subject to p>agraph 7#d71 if1 & 7,b7 by add+ at ! end ! foll[+ new p>agraph3 7#d7 ,special rules = aggregation ( initial exp5ditures ( corporations & p>tn]%ips ,= purposes ( p>agraph 7#a71 if1 at ! "t a corporation or p>tn]%ip fir/ beg9s ! active conduct ( "o or m trades or bus9esses1 a taxpay] has bo? />t-up exp5ditures ) respect to su* trades or bus9esses & organizational exp5ditures ) respect to su* entity-- 7,a7 any election "u p>agraph 7#a7 %all cov] bo? su* />t-up & organizational exp5ditures1 7,b7 ! am\nt ( ! d$uction "u p>agraph 7#a77;,a7 ) respect to all su* />t-up & organizational exp5ditures %all n exce$ ! limitation "u clause 7ii7 ( p>agraph 7#a77;,a71 & 7,c7 ! am\nt ( su* />t-up & organizational exp5ditures rema9+ aft] su* d$uction %all be amortiz$ "u p>agraph 7#a77;,b74 4 7c7 ,con=m+ am5dm5ts 7#a7 7,a7 ,"p ,,viii ( sub*apt] ,b ( *apt] #a is am5d$ by /rik+ section #bdh4 7,b7 ,section #ef7;g77#d77;,d77ii7 is am5d$ by /rik+ ,sections #agc & #bdh & ins]t+ ,section #agc4 7,c7 ,section #agj7;b77#b77;,d77ii7 is am5d$ by /rik+ 7except section #bdh74 7,d7 ,section #cab7n77#c7 is am5d$ by /rik+ ,sections #agc & #bdh & ins]t+ ,sections #agc & #aie4 7,e7 ,section #ece7;b77#c7 is am5d$ by /rik+ 7except section #bdh74 7,f7 ,section #ede7;b77#c7 is am5d$ by /rik+ 7except section #bdh74 7,g7 ,section #hcd7;c77#g7 is am5d$ by /rik+ 7except section #bdh74 7,h7 ,section #heb7;b77#b77;,c7 is am5d$ by /rik+ 7except section #bdh74 7,i7 ,section #heg7;b77#b77;,a7 is am5d$ by /rik+ 7except section #bdh74 7,j7 ,section #acfc7;b77#c7 is am5d$ by /rik+ section #bdh & ins]t+ section #aie4 7,k7 ,section #acge7;b77#a77;,b77i7 is am5d$ by /rik+ 7o!r ?an ! d$uction all[$ by section #bdh1 relat+ to organization exp5ditures74 7,l7 ,! table ( sections = "p ,,viii ( sub*apt] ,b ( *apt] #a is am5d$ by /rik+ ! item relat+ to section #bdh4 7#b7 7,a7 ,section #gji is am5d$ to read z foll[s3 #gji4 ,treatm5t ( syndication fees ,no d$uction %all be all[$ "u ?is *apt] to a p>tn]%ip or to any p>tn] ( ! p>tn]%ip = any am\nts paid or incurr$ to promote ! sale ( 7or to sell7 an int]e/ 9 ! p>tn]%ip4 4 7,b7 ,! item relat+ to section #gji 9 ! table ( sections = "p ,i ( sub*apt] ,k ( *apt] #a is am5d$ by /rik+ organization &4 7d7 ,cl]ical am5dm5ts 7#a7 ,! head+ ( section #aie is am5d$ by /rik+ exp5ditures & ins]t+ & organizational exp5ditures4 7#b7 ,! item relat+ to section #aie 9 ! table ( cont5ts ( "p ,,vi ( sub*apt] ,b ( *apt] #a is am5d$ to read z foll[s3 ,sec4 #aie4 ,/>t-up & organizational exp5ditures4 4 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to elections :i* fir/ take effect = taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjag4 ,,ii ,acc\nt+ me?ods #bja4 ,modifications ( gross receipts te/ = use ( ca% me?od ( acc\nt+ by corporations & p>tn]%ips 7a7 ,modifications ( gross receipts te/ 7#a7 ,9 g5]al ,s mu* ( section #ddh7;c7 z prec$es p>agraph 7#b7 is am5d$ to read z foll[s3 7c7 ,gross receipts te/ 7#a7 ,9 g5]al ,a corporation or p>tn]%ip meets ! gross receipts te/ ( ?is subsection = any taxable ye> if ! av]age annual gross receipts ( su* entity = ! #c-taxable-ye> p]iod end+ ) ! taxable ye> :i* prec$es su* taxable ye> does n exce$ ! applicable doll> limit4 4 7#b7 ,applicable doll> limit ,subsection 7c7 ( section #ddh is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#d7 ,applicable doll> limit 7,a7 ,9 g5]al ,! applicable doll> limit is #ae1jjj1jjj4 7,b7 ,adju/m5t = inflation ,9 ! case ( any taxable ye> beg9n+ aft] ,decemb] #ca1 #bjah1 ! #ae1jjj1jjj am\nt "u subp>agraph 7,a7 %all be increas$ by an am\nt equal to-- 7i7 su* doll> am\nt1 multipli$ by 7ii7 ! co/-(-liv+ adju/m5t det]m9$ "u section #a7;f77#c7 = ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 by sub/itut+ cal5d> ye> #bjag = cal5d> ye> #aiib 9 subp>agraph 7,b7 !re(4 ,if any am\nt z increas$ "u ! prec$+ s5t5ce is n a multiple ( #a1jjj1 su* am\nt %all be r\nd$ to ! ne>e/ multiple ( #a1jjj4 4 7#c7 ,*ange 9 me?od ( acc\nt+ ,p>agraph 7#g7 ( section #ddh7;d7 is am5d$-- 7,a7 by /rik+ ,9 ! case ( & all t foll[s up to subp>agraph 7,a7 & ins]t+3 ,if a taxpay] *anges its me?od ( acc\nt+ because ! taxpay] is prohibit$ f us+ ! ca% receipts & disbursem5t me?od ( acc\nt+ by reason ( subsection 7a7 or is no long] prohibit$ f us+ su* me?od by reason ( su* subsection--1 & 7,b7 by ins]t+ & at ! end ( subp>agraph 7,a71 by /rik+ 1 &at ! end ( subp>agraph 7,b7 & ins]t+ a p]iod1 & by /rik+ subp>agraph 7,c74 7#d7 ,con=m+ am5dm5ts 7,a7 ,p>agraph 7#c7 ( section #ddh7;b7 is am5d$ to read z foll[s3 7#c7 ,entities satisfy+ gross receipts te/ ,p>agraphs 7#a7 & 7#b7 ( subsection 7a7 %all n apply to any corporation or p>tn]%ip = any taxable ye> if su* entity meets ! gross receipts te/ ( subsection 7c7 = ! taxable ye>4 4 7,b7 ,clause 7iii7 ( section #agb7;b77#a77;,e7 is am5d$ by ins]t+ 1 appli$ by sub/itut+ #e1jjj1jjj = ! applicable doll> limit 9 p>agraph 7#a7 !re(1 aft] section #ddh7;c74 7b7 ,application ( modifications to f>m+ corporations 7#a7 ,9 g5]al ,p>agraph 7#a7 ( section #ddg7;d7 is am5d$ to read z foll[s3 7#a7 ,9 g5]al ,a corporation meets ! requirem5ts ( ?is subsection = any taxable ye> ) respect to its gross receipts if ! corporation meets ! gross receipts te/ ( section #ddh7;c7 = ! taxable ye>4 4 7#b7 ,family corporations ,p>agraph 7#b7 ( section #ddg7;d7 is am5d$-- 7,a7 by /rik+ subp>agraph 7,a7 & ins]t+ ! foll[+3 7,a7 ,9 g5]al ,9 ! case ( a family corporation1 9 apply+ section #ddh7;c7 = purposes ( p>agraph 7#a7-- 7i7 p>agraph 7#a7 ( section #ddh7;c7 %all be appli$ by sub/itut+ ! applicable family corporation limit = ! applicable doll> limit1 & 7ii7 ! rules ( subp>agraph 7,b7 %all apply 9 comput+ gross receipts4 1 7,b7 ,clause 7i7 ( section #ddg7;d77#b77;,b7 is am5d$ by /rik+ ! la/ s5t5ce ( p>agraph 7#a7 & ins]t+ p>agraph 7#b7 ( section #ddh7;c71 & 7,c7 by add+ at ! end ! foll[+ new subp>agraph3 7,d7 ,applicable family corporation limit 7i7 ,9 g5]al ,! applicable family corporation limit is #be1jjj1jjj4 7ii7 ,adju/m5t = inflation ,9 ! case ( any taxable ye> beg9n+ aft] ,decemb] #ca1 #bjah1 ! #be1jjj1jjj am\nt "u clause 7i7 %all be increas$ by an am\nt equal to-- 7,i7 su* doll> am\nt1 multipli$ by 7,,ii7 ! co/-(-liv+ adju/m5t det]m9$ "u section #a7;f77#c7 = ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 by sub/itut+ cal5d> ye> #bjag = cal5d> ye> #aiib 9 subp>agraph 7,b7 !re(4 ,if any am\nt z increas$ "u ! prec$+ s5t5ce is n a multiple ( #a1jjj1 su* am\nt %all be r\nd$ to ! ne>e/ multiple ( #a1jjj4 4 7#c7 ,*ange 9 me?od ( acc\nt+ ,section #ddg7;f7 is am5d$-- 7,a7 by /rik+ ,9 ! case ( & all t foll[s up to p>agraph 7#a7 & ins]t+3 ,if a taxpay] *anges its me?od ( acc\nt+ because ! taxpay] is requir$ to use an accrual me?od ( acc\nt+ by reason ( subsection 7a7 or is no long] requir$ to use su* me?od by reason ( su* subsection--1 & 7,b7 by /rik+ p>agraph 7#b7 & ins]t+3 7#b7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 & 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjag4 #bjb4 ,cl>ification ( inv5tory acc\nt+ rules = small bus9esses 7a7 ,cl>ification ( inv5tory rules 7#a7 ,9 g5]al ,section #dga is am5d$ by r$esignat+ subsection 7c7 z subsection 7d7 & by ins]t+ aft] subsection 7b7 ! foll[+ new subsection3 7c7 ,small bus9ess taxpay]s n requir$ ,to use inv5tories 7#a7 ,9 g5]al ,a qualifi$ taxpay] %all n be requir$ to use inv5tories "u ?is section = a taxable ye>4 7#b7 ,treatm5t ( taxpay]s n us+ inv5tories ,a qualifi$ taxpay] :o is n requir$ "u ?is subsection to use inv5tories ) respect to any prop]ty = a taxable ye> beg9n+ aft] ,decemb] #ca1 #bjag1 may treat su* prop]ty z an incid5tal mat]ial or supply = su* taxable ye>4 7#c7 ,qualifi$ taxpay] ,= purposes ( ?is subsection1 ! t]m qualifi$ taxpay] means1 ) respect to any taxable ye>1 a taxpay] :o meets ! gross receipts te/ ( section #ddh7;c7 = ! taxable ye>4 ,su* t]m %all n include a tax %elt] prohibit$ f us+ ! ca% receipts & disbursem5ts me?od ( acc\nt+ "u section #ddh7;a77#c74 7#d7 ,coord9ation ) section #dha ,if a taxpay] *anges its me?od ( acc\nt+ because ! taxpay] is n requir$ to use inv5tories by reason ( p>agraph 7#a7 or is requir$ to use inv5tories because su* p>agraph no long] applies to ! taxpay]-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 & 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y4 4 7#b7 ,con=m+ am5dm5t ,subsection 7c7 ( section #bfc;,a is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#h7 ,exclusion f inv5tory rules ,no?+ 9 ?is section %all require ! use ( inv5tories = any taxable ye> by a qualifi$ taxpay] 7)9 ! mean+ ( section #dga7;c77#c77 :o is n requir$ to use inv5tories "u section #dga = su* taxable ye>4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjag4 #bjc4 ,modification ( rules = capitalization & inclusion 9 inv5tory co/s ( c]ta9 exp5ses 7a7 ,gross receipts exception ,to apply to prop]ty produc$ by ! taxpay] ,section #bfc;,a7b7 is am5d$ by /rik+ all t foll[s p>agraph 7#a7 & ins]t+ ! foll[+ new p>agraphs3 7#b7 ,prop]ty acquir$ = resale ,real or p]sonal prop]ty describ$ 9 section #abba7;a77#a7 :i* is acquir$ by ! taxpay] = resale4 7#c7 ,exception = small bus9esses ,?is section %all n apply to any prop]ty produc$ or acquir$ by ! taxpay] dur+ any taxable ye> if ! taxpay] is a qualifi$ taxpay] 7z def9$ 9 section #dga7;c77#c77 = ! taxable ye>4 7#d7 ,films1 s\nd record+s1 books1 etc ,= purposes ( ?is subsection1 ! t]m tangible p]sonal prop]ty %all include a film1 s\nd record+1 video tape1 book1 or simil> prop]ty4 7#e7 ,coord9ation ) section #dha ,if a taxpay] *anges its me?od ( acc\nt+ because ?is section does n apply to ! taxpay] by reason ( ! exception "u p>agraph 7#c7 or ?is section applies to ! taxpay] because su* exception no long] applies to ! taxpay]-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 & 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjag4 #bjd4 ,increase 9 gross receipts te/ = con/ruction contract exception to p]c5tage ( completion me?od 7a7 ,increase 7#a7 ,9 g5]al ,clause 7ii7 ( section #dfj7;e77#a77;,b7 is am5d$ to read z foll[s3 7ii7 :o meets ! gross receipts te/ ( section #ddh7;c7 = ! taxable ye> 9 :i* su* contract is ent]$ into4 4 7#b7 ,con=m+ am5dm5ts 7,a7 ,p>agraph 7#b7 ( section #dfj7;e7 is am5d$ to read z foll[s3 7#b7 ,additional rules = det]m9+ gross receipts ,= purposes ( p>agraph 7#a77;,b77ii71 ! ,secret>y %all prescribe regulations :i* provide attribution rules simil> to section #ddh7;c7 & :i* take into acc\nt gross receipts ( taxpay]s :o engage 9 con/ruction contracts ?r\gh p>tn]%ips1 jo9t v5tures1 & corporations & :i* w\ld o!rwise n be tak5 into acc\nt "u su* section4 4 7,b7 ,section #dfj7;e7 is am5d$ by /rik+ p>agraph 7#c7 & by r$esignat+ p>agraphs 7#d7 ?r\gh 7#f7 z p>agraphs 7#c7 ?r\gh 7#e71 respectively4 7,c7 ,! la/ s5t5ce ( section #ef7;a77#c7 is am5d$ by /rik+ section #dfj7;e77#f7 & ins]t+ section #dfj7;e77#e74 7b7 ,coord9ation ) section #dha ,section #dfj7;e71 z am5d$ by subsection 7a71 is am5d$ by add+ at ! end ! foll[+3 7#f7 ,coord9ation ) section #dha ,if a taxpay] *anges its me?od ( acc\nt+ because subsections 7a71 7b71 & 7c7 7#a7 & 7#b7 d n apply by reason ( ! exception "u p>agraph 7#a77;,b7 or su* subsections apply to ! taxpay] because su* exception no long] applies to ! taxpay]-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y1 & 7,c7 su* *ange %all be p]mitt$ only on a cut-(f basis & no adju/m5ts "u section #dha7;a7 %all be made4 4 7c7 ,effective date ,! am5dm5t made by ?is section %all apply to contracts ent]$ into aft] ,decemb] #ca1 #bjag1 9 taxable ye>s end+ aft] su* date4 ,,iii ,modifications ( exp5s+ & co/ recov]y rules ,a ,exp5s+ rules #cja4 ,modifications ( rules = exp5s+ depreciable bus9ess assets 7a7 ,increase 9 limitation 7#a7 ,doll> limitation ,section #agi7;b77#a7 by /rik+ #ejj1jjj & ins]t+ #b1jjj1jjj4 7#b7 ,r$uction 9 limitation ,section #agi7;b77#b7 is am5d$ by /rik+ #b1jjj1jjj & ins]t+ #c1jjj1jjj4 7#c7 ,inflation adju/m5ts 7,a7 ,9 g5]al ,subp>agraph 7,a7 ( section #agi7;b77#f7 is am5d$-- 7i7 by /rik+ #bjae & ins]t+ #bjah1 & 7ii7 by /rik+ cal5d> ye> #bjad 9 clause 7ii7 & ins]t+ cal5d> ye> #bjag4 7,b7 ,sport utility vehicles ,section #agi7;b77#f7 is am5d$-- 7i7 by /rik+ p>agraphs 7#a7 & 7#b7 9 subp>agraph 7,a7 & ins]t+ p>agraphs 7#a71 7#b71 & 7#e77;,a71 & 7ii7 by ins]t+ 77#ajj 9 ! case ( any increase 9 ! am\nt "u p>agraph 7#e77;,a77 aft] #aj1jjj 9 subp>agraph 7,b74 7b7 ,section #agi prop]ty ,to include qualifi$ real prop]ty 7#a7 ,9 g5]al ,subp>agraph 7,b7 ( section #agi7;d77#a7 is am5d$ to read z foll[s3 7,b7 :i* is-- 7i7 section #abde prop]ty 7z def9$ 9 section #abde7;a77#c771 or 7ii7 qualifi$ real prop]ty 7z def9$ 9 subsection 7f771 & 4 7#b7 ,qualifi$ real prop]ty def9$ ,section #agi7;f7 is am5d$ to read z foll[s3 7f7 ,qualifi$ real prop]ty ,= purposes ( ?is subsection1 ! t]m qualifi$ real prop]ty means-- 7#a7 any qualifi$ improvem5t prop]ty describ$ 9 section #afh7k77#c71 & 7#b7 any ( ! foll[+ improvem5ts to nonresid5tial real prop]ty plac$ 9 s]vice aft] ! date su* prop]ty 0 fir/ plac$ 9 s]vice3 7,a7 ,ro(s4 7,b7 ,heat+1 v5tilation1 & air-condition+ prop]ty4 7,c7 ,fire protection & al>m sy/ems4 7,d7 ,security sy/ems4 4 7c7 ,repeal ( exclusion = c]ta9 prop]ty ,! la/ s5t5ce ( section #agi7;d77#a7 is am5d$ by ins]t+ 7o!r ?an p>agraph 7#b7 !re(7 aft] section #ej7;b74 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to prop]ty plac$ 9 s]vice 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjag4 ,b ,co/ recov]y rules #caa4 #ej-p]c5t exp5s+ made p]man5t 7a7 ,9 g5]al ,section #afh7k77#b7 is am5d$ to read z foll[s3 7#b7 ,qualifi$ prop]ty ,= purposes ( ?is subsection-- 7,a7 ,9 g5]al ,! t]m qualifi$ prop]ty means prop]ty-- 7i7 7,i7 to :i* ?is section applies :i* has a recov]y p]iod ( #bj ye>s or less1 7,,ii7 :i* is comput] s(tw>e 7z def9$ 9 section #afg7;f77#a77;,b77 = :i* a d$uction is all[able "u section #afg7;a7 )\t reg>d to ?is subsection1 7,,iii7 :i* is wat] utility prop]ty1 or 7,,iv7 :i* is qualifi$ improvem5t prop]ty1 & 7ii7 ! orig9al use ( :i* comm5ces ) ! taxpay]4 7,b7 ,exception = alt]native depreciation prop]ty ,! t]m qualifi$ prop]ty %all n include any prop]ty to :i* ! alt]native depreciation sy/em "u subsection 7g7 applies1 det]m9$-- 7i7 )\t reg>d to p>agraph 7#g7 ( subsection 7g7 7relat+ to election to h sy/em apply71 & 7ii7 aft] application ( section #bhj;,f7b7 7relat+ to li/$ prop]ty ) limit$ bus9ess use74 7,c7 ,special rules 7i7 ,sale-leasebacks ,= purposes ( clause 7ii7 & subp>agraph 7,a77ii71 if prop]ty is-- 7,i7 orig9ally plac$ 9 s]vice by a p]son1 & 7,,ii7 sold & leas$ back by su* p]son )9 #c mon?s aft] ! date su* prop]ty 0 orig9ally plac$ 9 s]vice1 su* prop]ty %all be treat$ z orig9ally plac$ 9 s]vice n e>li] ?an ! date on :i* su* prop]ty is us$ "u ! leaseback ref]r$ to 9 subclause 7,,ii74 7ii7 ,syndication ,= purposes ( subp>agraph 7,a77ii71 if-- 7,i7 prop]ty is orig9ally plac$ 9 s]vice by ! lessor ( su* prop]ty1 7,,ii7 su* prop]ty is sold by su* lessor or any subsequ5t pur*as] )9 #c mon?s aft] ! date su* prop]ty 0 orig9ally plac$ 9 s]vice 7or1 9 ! case ( multiple units ( prop]ty subject to ! same lease1 )9 #c mon?s aft] ! date ! f9al unit is plac$ 9 s]vice1 s long z ! p]iod betwe5 ! "t ! fir/ unit is plac$ 9 s]vice & ! "t ! la/ unit is plac$ 9 s]vice does n exce$ #ab mon?s71 & 7,,iii7 ! us] ( su* prop]ty aft] ! la/ sale dur+ su* #c-mon? p]iod rema9s ! same z :5 su* prop]ty 0 orig9ally plac$ 9 s]vice1 su* prop]ty %all be treat$ z orig9ally plac$ 9 s]vice n e>li] ?an ! date ( su* la/ sale4 7,d7 ,coord9ation ) section #bhj;,f ,= purposes ( section #bhj;,f-- 7i7 ,automobiles ,9 ! case ( a pass5g] automobile 7z def9$ 9 section #bhj;,f7d77#e77 :i* is qualifi$ prop]ty1 ! ,secret>y %all increase ! limitation "u section #bhj;,f7a77#a77;,a77i7 to an am\nt equal to ! less] (-- 7,i7 #ej p]c5t ( ! adju/$ basis ( su* automobile1 or 7,,ii7 #be1jjj4 7ii7 ,li/$ prop]ty ,! d$uction all[able "u p>agraph 7#a7 %all be tak5 into acc\nt 9 comput+ any recapture am\nt "u section #bhj;,f7b77#b74 7iii7 ,inflation adju/m5t ,9 ! case ( any taxable ye> beg9n+ 9 a cal5d> ye> aft] #bjah1 ! #be1jjj am\nt 9 clause 7i7 %all be increas$ by an am\nt equal to-- 7,i7 su* doll> am\nt1 multipli$ by 7,,ii7 ! automobile price inflation adju/m5t det]m9$ "u section #bhj;,f7d77#g77;,b77i7 = ! cal5d> ye> 9 :i* su* taxable ye> beg9s by sub/itut+ #bjag = #aihg 9 subclause 7,,ii7 !re(4 ,if any increase "u ! prec$+ s5t5ce is n a multiple ( #ajj1 su* increase %all be r\nd$ to ! ne>e/ multiple ( #ajj4 7,e7 ,d$uction all[$ 9 comput+ m9imum tax ,= purposes ( det]m9+ alt]native m9imum taxable income "u section #ee1 ! d$uction "u section #afg = qualifi$ prop]ty %all be det]m9$ )\t reg>d to any adju/m5t "u section #ef4 4 7b7 ,con=m+ am5dm5ts 7#a7 ,am5dm5ts relat$ to #ej-p]c5t exp5s+ 7,a7 ,ea* ( ! foll[+ provisions are am5d$ by /rik+ 7#b77;,f7 ea* place x appe>s & ins]t+ 7#b77;,d73 7i7 ,subp>agraphs 7,a77i71 7,b77i71 & 7,d77ii77,i7 ( section #afh7k77#d74 7ii7 ,section #afh7k77#g74 7,b7 ,section #afh7k77#e7 is am5d$-- 7i7 9 subp>agraph 7,a7-- 7,i7 by /rik+ be=e ,janu>y #a1 #bjbj1 & 7,,ii7 by /rik+ be=e su* date1 7ii7 9 subp>agraph 7,b77ii7-- 7,i7 by ins]t+ crop or aft] w h m ?an "o1 & 7,,ii7 by ins]t+ a m>ketable crop or yield ( aft] beg9s be>+1 7iii7 by /rik+ 7#b77;,g7 9 subp>agraph 7,e7 & ins]t+ 7#b77;,e71 & 7iv7 by /rik+ subp>agraph 7,f74 7,c7 ,section #afh7k71 z am5d$ by subp>agraphs 7,a77ii7 & 7,d71 is am5d$ by /rik+ p>agraph 7#f7 & by r$esignat+ p>agraph 7#g7 z p>agraph 7#f74 7,d7 ,section #afh7k77#g71 z 9 effect be=e ! am5dm5ts made by subp>agraphs 7,a77ii7 & 7,c71 is am5d$ by /rik+ p>agraphs 7#a7 & 7#b77;,f7 & ins]t+ p>agraphs 7#a71 7#b77;,f71 & 7#d74 7,e7 ,section #afh7k7 is am5d$ by /rik+ acquir$ aft] ,decemb] #ca1 #bjjg1 & be=e ,janu>y #a1 #bjbj 9 ! head+ !re(4 7,f7 ,subsections 7e77#g77;,b71 7k77#d71 7l77#c77;,a71 7m77#b77;,b77i71 & 7n77#b77;,b77i7 ( section #afh are ea* am5d$ by /rik+ bonus depreciation ea* place x appe>s 9 ! text & head+s !re( & ins]t+ #ej-p]c5t exp5s+4 7#b7 ,o!r con=m+ am5dm5ts 7,a7 ,section #afh7l77#c77;,b7 is am5d$ by /rik+ subsection 7k77#b77;,d7 & ins]t+ subsection 7k77#b77;,b74 7,b7 ,section #afh7l77#d7 is am5d$ by /rik+ subsection 7k77#b77;,e7 & ins]t+ subsection 7k77#b77;,c74 7,c7 ,section #afh7l77#e7 is am5d$ by /rik+ subsection 7k77#b77;,g7 & ins]t+ subsection 7k77#b77;,e74 7,d7 ,section #dfj7;c77#f77;,b7 is am5d$ by /rik+ :i*-- & all t foll[s & ins]t+ :i* has a recov]y p]iod ( #g ye>s or less44 7c7 ,effective dates 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjag1 9 taxable ye>s end+ aft] su* date4 7#b7 ,c]ta9 te*nical corrections 7,a7 ,! am5dm5ts made by subsection 7b77#a77;,b77ii7 %all apply to specifi$ plants plant$ or graft$ aft] ,decemb] #ca1 #bjae4 7,b7 ,! am5dm5t made by subsection 7b77#a77;,d7 %all apply to prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjae1 9 taxable ye>s end+ aft] su* date4 #cab4 ,modifications ( treatm5t ( c]ta9 f>m prop]ty 7a7 ,treatm5t ( c]ta9 f>m prop]ty z #e-,ye> prop]ty ,clause 7vii7 ( section #afh7;e77#c77;,b7 is am5d$ by /rik+ aft] ,decemb] #ca1 #bjjh1 & :i* is plac$ 9 s]vice be=e ,janu>y #a1 #bjaj4 7b7 ,repeal ( requir$ use ( #aej-,p]c5t decl9+ balance me?od ,section #afh7;b77#b7 is am5d$ by /rik+ subp>agraph 7,b7 & by r$esignat+ subp>agraphs 7,c7 & 7,d7 z subp>agraphs 7,b7 & 7,c71 respectively4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjag1 9 taxable ye>s end+ aft] su* date4 #cac4 ,secret>ial requirem5t to reexam9e economic depreciation = classes ( depreciable prop]ty 7a7 ,9 g5]al ,p>agraph 7#a7 ( section #afh7;i7 is am5d$ to read z foll[s3 7#a7 ,class life 7,a7 ,9 g5]al ,except z provid$ 9 ?is section1 ! t]m class life means ! class life 7if any7 :i* w\ld be applicable ) respect to any prop]ty z ( ,janu>y #a1 #aihf1 "u subsection 7m7 ( section #afg 7det]m9$ )\t reg>d to p>agraph 7#d7 & z if ! taxpay] _h made an election "u su* subsection74 ,! ref]5ce 9 ?is p>agraph to subsection 7m7 ( section #afg %all be treat$ z a ref]5ce to su* subsection z 9 effect on ! day be=e ! date ( ! enactm5t ( ! ,rev5ue ,reconciliation ,act ( #aiij4 7,b7 ,secret>ial au?ority to modify ,rev4 ,proc4 #hg-ef 7i7 ,9 g5]al ,! ,secret>y1 ?r\gh ! ,(fice ( ,tax ,analysis & 9 consultation ) ! ,bureau ( ,economic ,analysis ( ! ,dep>tm5t ( ,comm]ce1 %all conduct an on-go+ /udy to-- 7,i7 det]m9e1 & develop a s*$ule (1 ! economic depreciation ( ! major categories ( depreciable prop]ty 7o!r ?an specifi$ prop]ty7 to approximate con/ant /raight-l9e depreciation1 & 7,,ii7 develop recomm5dations reg>d+ ! prop] economic depreciation = specifi$ prop]ty4 7ii7 ,report ,n lat] ?an ,decemb] #ca1 #bjbj1 & n less frequ5tly ?an e #e ye>s aft] su* date1 ! ,secret>y %all submit to ! ,committee on ,f9ance ( ! ,s5ate & to ! ,committee on ,ways & ,means ( ! ,h\se ( ,repres5tatives-- 7,i7 any s*$ule develop$ "u clause 7i77,i71 & 7,,ii7 any recomm5dations develop$ "u clause 7i77,,ii74 7iii7 ,effective date ( s*$ules ,any s*$ule develop$ "u clause 7i77,i7 & submitt$ to ,congress "u clause 7ii7 %all take effect ) respect to prop]ty plac$ 9 s]vice on or aft] fir/ day ( ! fir/ cal5d> ye> beg9n+ at lea/ #a ye> aft] ! date su* s*$ule is submitt$4 7,c7 ,treatm5t "u ,congressional ,review ,act ,= purposes ( apply+ *apt] #h ( title #e1 ,unit$ ,/ates ,code1 any s*$ule develop$ & submitt$ "u subp>agraph 7,b7 %all be treat$ z a major rule4 7,d7 ,specifi$ prop]ty ,= purposes ( subp>agraph 7,b71 ! t]m specifi$ prop]ty means-- 7i7 any prop]ty :i* is classifi$ "u subsection 7e77#c7 7o!r ?an subp>agraph 7,c77v7 !re(71 or 7ii7 any nonresid5tial real prop]ty1 resid5tial r5tal prop]ty1 railroad grad+ or tunnel bore1 or wat] utility prop]ty4 4 7b7 ,effective date ,! am5dm5t made by ?is section %all take effect on ! date ( ! enactm5t ( ?is ,act4 #cad4 ,modifications to depreciation limitations on luxury automobiles & p]sonal use prop]ty 7a7 ,luxury automobiles 7#a7 ,9 g5]al #bhj;,f7a77#a77;,a7 is am5d$-- 7,a7 by /rik+ #b1efj 9 clause 7i7 & ins]t+ #aj1jjj1 7,b7 by /rik+ #d1ajj 9 clause 7ii7 & ins]t+ #af1jjj1 7,c7 by /rik+ #b1dej 9 clause 7iii7 & ins]t+ #i1fjj1 & 7,d7 by /rik+ #a1dge 9 clause 7iv7 & ins]t+ #e1gfj4 7#b7 ,con=m+ am5dm5ts 7,a7 ,clause 7ii7 ( section #bhj;,f7a77#a77;,b7 is am5d$ by /rik+ #a1dge 9 ! text & head+ & ins]t+ #e1gfj4 7,b7 ,p>agraph 7#g7 ( section #bhj;,f7d7 is am5d$-- 7i7 by /rik+ #aihh 9 subp>agraph 7,a7 & ins]t+ #bjah1 & 7ii7 by /rik+ #aihg 9 subp>agraph 7,b77i77,,ii7 & ins]t+ #bjag4 7b7 ,removal ( comput] equipm5t f li/$ prop]ty 7#a7 ,9 g5]al ,section #bhj;,f7d77#d77;,a7 is am5d$ by ins]t+ & at ! end ( clause 7iii7 & by /rik+ clause 7iv74 7#b7 ,con=m+ am5dm5t ,section #bhj;,f7d77#d7 is am5d$ by /rik+ subp>agraph 7,b7 & by r$esignat+ subp>agraph 7,c7 z subp>agraph 7,b74 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjag1 9 taxable ye>s end+ aft] su* date4 #cae4 ,r$uction 9 amortization p]iod = intangibles 7a7 ,9 g5]al ,section #aig7;a7 is am5d$ by add+ at ! end ! foll[+ new s5t5ce3 ,9 ! case ( su* an intangible acquir$ aft] ! date ( ! enactm5t ( ! ,,inve/ ,act ( #bjag1 ! prec$+ s5t5ce %all be appli$ by sub/itut+ #aj-ye> p]iod = #ae-ye> p]iod44 7b7 ,application ( anti-,*urn+ rules ,section #aig7;f77#i7 is am5d$ by add+ at ! end ! foll[+3 7,g7 ,application to ,,inve/ ,act *anges ,if subp>agraph 7,a7 or 7,f7 w\ld apply to any section #aig intangible if-- 7i7 ! date ( ! enactm5t ( ! ,,inve/ ,act ( #bjag 7 sub/itut$ = ! date ( ! enactm5t ( ?is section ea* place x appe>s 9 ea* su* subp>agraph1 & 7ii7 ,may #ag1 #bjag 7 sub/itut$ = ,july #be1 #aiia ea* place x appe>s 9 subp>agraph 7,a71 !n ! la/ s5t5ce ( subsection 7a7 7relat+ to #aj-ye> amortization7 %all n apply to ! transf]ee ( su* intangible4 4 7c7 ,con=m+ am5dm5t ,section #aig7;e77#d77;,d77i7 is am5d$ by ins]t+ 7#aj ye>s 9 ! case ( a "r acquir$ aft] ! date ( ! enactm5t ( ! ,,inve/ ,act ( #bjag7 aft] #ae ye>s4 7d7 ,effective date ,! am5dm5ts made by ?is section apply to acquisitions aft] ! date ( ! enactm5t ( ?is ,act 9 taxable ye>s end+ aft] su* date4