S. 294

A bill to amend the Internal Revenue Code of 1986 to extend and modify the special allowance for property acquired during 2009 and to temporarily increase the limitation for expensing certain business assets.

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II

111th CONGRESS

1st Session

S. 294

IN THE SENATE OF THE UNITED STATES

January 21, 2009

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 of 1986 to extend and modify the special allowance for property acquired during 2009 and to temporarily increase the limitation for expensing certain business assets.

1.

Extension and modification of special allowance for certain property acquired during 2009

(a)

Extension

(1)

In general

Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended—

(A)

by striking January 1, 2010 and inserting January 1, 2011, and

(B)

by striking January 1, 2009 each place it appears and inserting January 1, 2010.

(2)

Conforming amendments

(A)

The heading for subsection (k) of section 168 of such Code is amended by striking January 1, 2009 and inserting January 1, 2010.

(B)

The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking pre-january 1, 2009 and inserting pre-january 1, 2010.

(C)

Subparagraph (D) of section 168(k)(4) of such Code is amended—

(i)

by striking and at the end of clause (i),

(ii)

by redesignating clause (ii) as clause (v), and

(iii)

by inserting after clause (i) the following new clauses:

(ii)

April 1, 2008 shall be substituted for January 1, 2008 in subparagraph (A)(iii)(I) thereof,

(iii)

January 1, 2009 shall be substituted for January 1, 2010 each place it appears,

(iv)

January 1, 2010 shall be substituted for January 1, 2011 in subparagraph (A)(iv) thereof, and

.

(D)

Subparagraph (B) of section 168(l)(5) of such Code is amended by striking January 1, 2009 and inserting January 1, 2010.

(E)

Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking January 1, 2009 and inserting January 1, 2010.

(3)

Effective dates

(A)

In general

Except as provided in subparagraph (B), the amendments made by this subsection shall apply to property placed in service after December 31, 2008, in taxable years ending after such date.

(B)

Technical amendment

Section 168(k)(4)(D)(ii) of the Internal Revenue Code of 1986, as added by paragraph (2)(C)(iii), shall apply to taxable years ending after March 31, 2008.

(b)

Inclusion of films or videotape as qualified property

(1)

In general

Section 168(k)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(H)

Certain films

The term qualified property includes property—

(i)

which is a motion picture film or video tape (within the meaning of subsection (f)(3)) for which a deduction is allowable under section 167(a) without regard to this section,

(ii)

the original use of which commences with the taxpayer after December 31, 2008,

(iii)

which is—

(I)

acquired by the taxpayer after December 31, 2008, and before January 1, 2010, but only if no written binding contract for the acquisition was in effect before January 1, 2009, or

(II)

acquired by the taxpayer pursuant to a written binding contract which was entered into after December 31, 2008, and before January 1, 2010, and

(iv)

which is placed in service by the taxpayer before January 1, 2010, or, in the case of property described in subparagraph (B), before January 1, 2011.

.

(2)

Conforming amendments

(A)

Subclause (I) of section 168(k)(2)(B)(i) of such Code is amended by inserting or (H) after subparagraph (A).

(B)

Clause (iii) of section 168(k)(2)(D) of such Code is amended by adding at the end the following new sentence: For purposes of the preceding sentence, all property described in subparagraph (H) shall be treated as one class of property..

(C)

Subparagraph (E) of section 168(k)(2) of such Code is amended by adding at the end the following new clause:

(v)

Application to film and videotape property

In the case of property described in subparagraph (H), clauses (i), (ii), (iii), and (iv) of this subparagraph shall be applied—

(I)

by substituting December 31, 2008 for December 31, 2007 each place it appears, and

(II)

by treating any reference to a clause of subparagraph (A) as a reference to the corresponding clause of subparagraph (H).

.

(3)

Effective date

The amendments made by this subsection shall apply to property placed in service after December 31, 2008.

2.

Temporary increase in limitations on expensing of certain depreciable business assets

(a)

In general

Paragraph (7) of section 179(b) of the Internal Revenue Code of 1986 is amended—

(1)

by inserting and 2009 after 2008 in the heading, and

(2)

by inserting or 2009 after In the case of any taxable year beginning in 2008.

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.