II
110th CONGRESS
2d Session
S. 2540
IN THE SENATE OF THE UNITED STATES
January 22 (legislative day, January 3), 2008
Mr. Specter introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code to provide expensing for certain property placed in service during 2008 and 2009.
Expensing for certain property placed in service during 2008 and 2009
In general
Section 168 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Special allowance for certain qualified property placed in service during 2008 and 2009
In general
In the case of any qualified property—
the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 100 percent of the adjusted basis of the qualified property, and
the adjusted basis of the qualified property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year.
Qualified property
For purposes of this subsection, the term qualified property means property—
which is 3-year property, 5-year property, or 7-year property,
the original use of which commences with the taxpayer on or after the starting date,
which is—
acquired by the taxpayer on or after the starting date and before the ending date, but only if no written binding contract for the acquisition was in effect before the starting date, or
acquired by the taxpayer pursuant to a written binding contract which was entered into on or after the starting date and before the ending date, and
which is placed in service by the taxpayer before the ending date.
Exceptions
Alternative depreciation property
This subsection shall not apply to any property to which the alternative depreciation system under subsection (g) applies, determined—
without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and
after application of section 280F(b) (relating to listed property with limited business use).
Election out
If a taxpayer makes an election under this subparagraph with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year.
Special rules
Self-constructed property
In the case of a taxpayer manufacturing, constructing, or producing property for the taxpayer's own use, the requirements of paragraph (2)(C) shall be treated as met if the taxpayer begins manufacturing, constructing, or producing the property after the starting date and before the ending date.
Sale-leasebacks
For purposes of subparagraph (C) and paragraph (2)(B), if property is—
originally placed in service on or after the starting date by a person, and
sold and leased back by such person within 3 months after the date such property was originally placed in service,
Syndication
For purposes of paragraph (2)(B), if—
property is originally placed in service on or after the starting date by the lessor of such property,
such property is sold by such lessor or any subsequent purchaser within 3 months after the date such property was originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months), and
the user of such property after the last sale during such 3-month period remains the same as when such property was originally placed in service,
Limitations related to users and related parties
This subsection shall not apply to any property if—
the user of such property (as of the date on which such property is originally placed in service) or a person which is related (within the meaning of section 267(b) or 707(b)) to such user or to the taxpayer had a written binding contract in effect for the acquisition of such property at any time before the starting date, or
in the case of property manufactured, constructed, or produced for such user's or person's own use, the manufacture, construction, or production of such property began at any time before the starting date.
Coordination with section 280F
For purposes of section 280F—
Automobiles
In the case of a passenger automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) by $7,650.
Listed property
The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2).
Deduction allowed in computing minimum tax
For purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified property shall be determined under this section without regard to any adjustment under section 56.
Starting date; ending date
For purposes of this paragraph—
Starting date
The term starting date means January 1, 2008.
Ending date
The term ending date means January 1, 2010.
.
Effective date
The amendment made by this section shall apply to property placed in service after December 31, 2007.