S. 2240

A bill to amend the Internal Revenue Code of 1986 to extend the allowance for bonus depreciation for certain business assets.

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II

112th CONGRESS

2d Session

S. 2240

IN THE SENATE OF THE UNITED STATES

March 27, 2012

Ms. Stabenow (for herself, Mr. Blunt, Mr. Brown of Ohio, and Mr. Roberts) 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 the allowance for bonus depreciation for certain business assets.

1.

Extension of allowance for bonus depreciation for certain business assets

(a)

Extension of 100 percent bonus depreciation

(1)

In general

Paragraph (5) of section 168(k) of the Internal Revenue Code of 1986 is amended—

(A)

by striking January 1, 2012 each place it appears and inserting January 1, 2013, and

(B)

by striking January 1, 2013 and inserting January 1, 2014.

(2)

Conforming amendments

(A)

The heading for paragraph (5) of section 168(k) of such Code is amended by striking Pre-2012 periods and inserting Pre-2013 periods.

(B)

Clause (ii) of section 460(c)(6)(B) of such Code is amended to read as follows:

(ii)

is placed in service—

(I)

after December 31, 2009, and before January 1, 2011 (January 1, 2012, in the case of property described in section 168(k)(2)(B)), or

(II)

after December 31, 2011, and before January 1, 2013 (January 1, 2014, in the case of property described in section 168(k)(2)(B)).

.

(3)

Effective date

The amendments made by this subsection shall apply to property placed in service after December 31, 2011.

(b)

Expansion of election To accelerate AMT credits in lieu of bonus depreciation

(1)

In general

Paragraph (4) of section 168(k) of such Code is amended to read as follows:

(4)

Election to accelerate amt credits in lieu of bonus depreciation

(A)

In general

If a corporation elects to have this paragraph apply for any taxable year—

(i)

paragraph (1) shall not apply to any eligible qualified property placed in service by the taxpayer in such taxable year,

(ii)

the applicable depreciation method used under this section with respect to such property shall be the straight line method, and

(iii)

the limitation imposed by section 53(c) for such taxable year shall be increased by the bonus depreciation amount which is determined for such taxable year under subparagraph (B).

(B)

Bonus depreciation amount

For purposes of this paragraph—

(i)

In general

The bonus depreciation amount for any taxable year is an amount equal to 20 percent of the excess (if any) of—

(I)

the aggregate amount of depreciation which would be allowed under this section for eligible qualified property placed in service by the taxpayer during such taxable year if paragraph (1) applied to all such property, over

(II)

the aggregate amount of depreciation which would be allowed under this section for eligible qualified property placed in service by the taxpayer during such taxable year if paragraph (1) did not apply to any such property.

The aggregate amounts determined under subclauses (I) and (II) shall be determined without regard to any election made under subsection (b)(2)(D), (b)(3)(D), or (g)(7) and without regard to subparagraph (A)(ii).
(ii)

Limitation

The bonus depreciation amount for any taxable year shall not exceed the lesser of—

(I)

50 percent of the minimum tax credit under section 53(b) for the first taxable year ending after December 31, 2011, or

(II)

the minimum tax credit under section 53(b) for such taxable year determined by taking into account only the adjusted minimum tax for taxable years ending before January 1, 2012 (determined by treating credits as allowed on a first-in, first-out basis).

(iii)

Aggregation rule

All corporations which are treated as a single employer under section 52(a) shall be treated—

(I)

as 1 taxpayer for purposes of this paragraph, and

(II)

as having elected the application of this paragraph if any such corporation so elects.

(C)

Eligible qualified property

For purposes of this paragraph, the term eligible qualified property means qualified property under paragraph (2), except that in applying paragraph (2) for purposes of this paragraph—

(i)

March 31, 2008 shall be substituted for December 31, 2007 each place it appears in subparagraph (A) and clauses (i) and (ii) of subparagraph (E) thereof,

(ii)

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

(iii)

only adjusted basis attributable to manufacture, construction, or production—

(I)

after March 31, 2008, and before January 1, 2010, and

(II)

after December 31, 2010, and before January 1, 2013, shall be taken into account under subparagraph (B)(ii) thereof.

(D)

Credit refundable

For purposes of section 6401(b), the aggregate increase in the credits allowable under part IV of subchapter A for any taxable year resulting from the application of this paragraph shall be treated as allowed under subpart C of such part (and not any other subpart).

(E)

Other rules

(i)

Election

Any election under this paragraph may be revoked only with the consent of the Secretary.

(ii)

Partnerships with electing partners

In the case of a corporation making an election under subparagraph (A) and which is a partner in a partnership, for purposes of determining such corporation’s distributive share of partnership items under section 702—

(I)

paragraph (1) shall not apply to any eligible qualified property, and

(II)

the applicable depreciation method used under this section with respect to such property shall be the straight line method.

(iii)

Certain partnerships

In the case of a partnership in which more than 50 percent of the capital and profits interests are owned (directly or indirectly) at all times during the taxable year by one corporation (or by corporations treated as 1 taxpayer under subparagraph (B)(iii)), for purposes of subparagraph (B), each partner shall take into account its distributive share of the amounts determined by the partnership under subclauses (I) and (II) of clause (i) of such subparagraph for the taxable year of the partnership ending with or within the taxable year of the partner. The preceding sentence shall apply only to amounts determined with respect to property placed in service after December 31, 2011.

(iv)

Special rule for passenger aircraft

In the case of any passenger aircraft, the written binding contract limitation under paragraph (2)(A)(iii)(I) shall not apply for purposes of subparagraphs (B)(i)(I) and (C).

.

(2)

Effective date

The amendment made by this subsection shall apply to taxable years ending after December 31, 2011.

(3)

Transitional rule

In the case of a taxable year beginning before January 1, 2012, and ending after December 31, 2011, the bonus depreciation amount determined under paragraph (4) of section 168(k) of the Internal Revenue Code of 1986 for such year shall be the sum of—

(A)

such amount determined under such paragraph as in effect on the date before the date of enactment of this Act—

(i)

taking into account only property placed in service before January 1, 2012, and

(ii)

multiplying the limitation under subparagraph (C)(ii) of such paragraph (as so in effect) by a fraction the numerator of which is the number of days in the taxable year before January 1, 2012, and the denominator of which is the number of days in the taxable year, and

(B)

such amount determined under such paragraph as amended by this Act—

(i)

taking into account only property placed in service after December 31, 2011, and

(ii)

multiplying the limitation under subparagraph (B)(ii) of such paragraph (as so in effect) by a fraction the numerator of which is the number of days in the taxable year after December 31, 2011, and the denominator of which is the number of days in the taxable year.