Internal Revenue Code:Sec. 280F. Limitation on depreciation for luxury automobiles; limitation where certain property used for personal purposes
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter B - Computation of Taxable Income
PART IX - ITEMS NOT DEDUCTIBLE
Statute
Sec. 280F. Limitation on depreciation for luxury automobiles;
limitation where certain property used for personal purposes
(a) Limitation on amount of depreciation for luxury automobiles
(1) Depreciation
(A) Limitation
The amount of the depreciation deduction for any taxable year
for any passenger automobile shall not exceed -
(i) $2,560 for the 1st taxable year in the recovery period,
(ii) $4,100 for the 2nd taxable year in the recovery
period,
(iii) $2,450 for the 3rd taxable year in the recovery
period, and
(iv) $1,475 for each succeeding taxable year in the
recovery period.
(B) Disallowed deductions allowed for years after recovery
period
(i) In general
Except as provided in clause (ii), the unrecovered basis of
any passenger automobile shall be treated as an expense for
the 1st taxable year after the recovery period. Any excess
of the unrecovered basis over the limitation of clause (ii)
shall be treated as an expense in the succeeding taxable
year.
(ii) $1,475 limitation
The amount treated as an expense under clause (i) for any
taxable year shall not exceed $1,475.
(iii) Property must be depreciable
No amount shall be allowable as a deduction by reason of
this subparagraph with respect to any property for any
taxable year unless a depreciation deduction would be
allowable with respect to such property for such taxable
year.
(iv) Amount treated as depreciation deduction
For purposes of this subtitle, any amount allowable as a
deduction by reason of this subparagraph shall be treated as
a depreciation deduction allowable under section 168.
(C) Special rule for certain clean-fuel passenger automobiles
(i) Modified automobiles
In the case of a passenger automobile which is propelled by
a fuel which is not a clean-burning fuel and to which is
installed qualified clean-fuel vehicle property (as defined
in section 179A(c)(1)(A)) for purposes of permitting such
vehicle to be propelled by a clean burning fuel (as defined
in section 179A(e)(1)), subparagraph (A) shall not apply to
the cost of the installed qualified clean burning vehicle
property.
(ii) Purpose built passenger vehicles
In the case of a purpose built passenger vehicle (as
defined in section 4001(a)(2)(C)(ii)), each of the annual
limitations specified in subparagraphs (A) and (B) shall be
tripled.
(iii) Application of subparagraph.--This
subparagraph shall apply to property placed in
service after August 5, 1997, and before January 1, 2007.
(2) Coordination with reductions in amount allowable by reason of
personal use, etc.
This subsection shall be applied before -
(A) the application of subsection (b), and
(B) the application of any other reduction in the amount of
any depreciation deduction allowable under section 168 by
reason of any use not qualifying the property for such credit
or depreciation deduction.
(b) Limitation where business use of listed property not greater
than 50 percent
(1) Depreciation
If any listed property is not predominantly used in a qualified
business use for any taxable year, the deduction allowed under
section 168 with respect to such property for such taxable year
and any subsequent taxable year shall be determined under section
168(g) (relating to alternative depreciation system).
(2) Recapture
(A) Where business use percentage does not exceed 50 percent
If -
(i) property is predominantly used in a qualified business
use in a taxable year in which it is placed in service, and
(ii) such property is not predominantly used in a qualified
business use for any subsequent taxable year,
then any excess depreciation shall be included in gross income
for the taxable year referred to in clause (ii), and the
depreciation deduction for the taxable year referred to in
clause (ii) and any subsequent taxable years shall be
determined under section 168(g) (relating to alternative
depreciation system).
(B) Excess depreciation
For purposes of subparagraph (A), the term ''excess
depreciation'' means the excess (if any) of -
(i) the amount of the depreciation deductions allowable
with respect to the property for taxable years before the 1st
taxable year in which the property was not predominantly used
in a qualified business use, over
(ii) the amount which would have been so allowable if the
property had not been predominantly used in a qualified
business use for the taxable year in which it was placed in
service.
(3) Property predominantly used in qualified business use
For purposes of this subsection, property shall be treated as
predominantly used in a qualified business use for any taxable
year if the business use percentage for such taxable year exceeds
50 percent.
(c) Treatment of leases
(1) Lessor's deductions not affected
This section shall not apply to any listed property leased or
held for leasing by any person regularly engaged in the business
of leasing such property.
(2) Lessee's deductions reduced
For purposes of determining the amount allowable as a deduction
under this chapter for rentals or other payments under a lease
for a period of 30 days or more of listed property, only the
allowable percentage of such payments shall be taken into
account.
(3) Allowable percentage
For purposes of paragraph (2), the allowable percentage shall
be determined under tables prescribed by the Secretary. Such
tables shall be prescribed so that the reduction in the deduction
under paragraph (2) is substantially equivalent to the applicable
restrictions contained in subsections (a) and (b).
(4) Lease term
In determining the term of any lease for purposes of paragraph
(2), the rules of section 168(i)(3)(A) shall apply.
(5) Lessee recapture
Under regulations prescribed by the Secretary, rules similar to
the rules of subsection (b)(3) shall apply to any lessee to which
paragraph (2) applies.
(d) Definitions and special rules
For purposes of this section -
(1) Coordination with section 179
Any deduction allowable under section 179 with respect to any
listed property shall be subject to the limitations of
subsections (a) and (b), and the limitation of paragraph (3) of
this subsection, in the same manner as if it were a depreciation
deduction allowable under section 168.
(2) Subsequent depreciation deductions reduced for deductions
allocable to personal use
Solely for purposes of determining the amount of the
depreciation deduction for subsequent taxable years, if less than
100 percent of the use of any listed property during any taxable
year is use in a trade or business (including the holding for the
production of income), all of the use of such property during
such taxable year shall be treated as use so described.
(3) Deductions of employee
(A) In general
Any employee use of listed property shall not be treated as
use in a trade or business for purposes of determining the
amount of any depreciation deduction allowable to the employee
(or the amount of any deduction allowable to the employee for
rentals or other payments under a lease of listed property)
unless such use is for the convenience of the employer and
required as a condition of employment.
(B) Employee use
For purposes of subparagraph (A), the term ''employee use''
means any use in connection with the performance of services as
an employee.
(4) Listed property
(A) In general
Except as provided in subparagraph (B), the term ''listed
property'' means -
(i) any passenger automobile,
(ii) any other property used as a means of transportation,
(iii) any property of a type generally used for purposes of
entertainment, recreation, or amusement,
(iv) any computer or peripheral equipment (as defined in
section 168(i)(2)(B)),
(v) any cellular telephone (or other similar
telecommunications equipment), and
(vi) any other property of a type specified by the
Secretary by regulations.
(B) Exception for certain computers
The term ''listed property'' shall not include any computer
or peripheral equipment (as so defined) used exclusively at a
regular business establishment and owned or leased by the
person operating such establishment. For purposes of the
preceding sentence, any portion of a dwelling unit shall be
treated as a regular business establishment if (and only if)
the requirements of section 280A(c)(1) are met with respect to
such portion.
(C) Exception for property used in business of transporting
persons or property
Except to the extent provided in regulations, clause (ii) of
subparagraph (A) shall not apply to any property substantially
all of the use of which is in a trade or business of providing
to unrelated persons services consisting of the transportation
of persons or property for compensation or hire.
(5) Passenger automobile
(A) In general
Except as provided in subparagraph (B), the term ''passenger
automobile'' means any 4-wheeled vehicle -
(i) which is manufactured primarily for use on public
streets, roads, and highways, and
(ii) which is rated at 6,000 pounds unloaded gross vehicle
weight or less.
In the case of a truck or van, clause (ii) shall be applied by
substituting ''gross vehicle weight'' for ''unloaded gross
vehicle weight''.
(B) Exception for certain vehicles
The term ''passenger automobile'' shall not include -
(i) any ambulance, hearse, or combination ambulance-hearse
used by the taxpayer directly in a trade or business,
(ii) any vehicle used by the taxpayer directly in the trade
or business of transporting persons or property for
compensation or hire, and
(iii) under regulations, any truck or van.
(6) Business use percentage
(A) In general
The term ''business use percentage'' means the percentage of
the use of any listed property during any taxable year which is
a qualified business use.
(B) Qualified business use
Except as provided in subparagraph (C), the term ''qualified
business use'' means any use in a trade or business of the
taxpayer.
(C) Exception for certain use by 5-percent owners and related
persons
(i) In general
The term ''qualified business use'' shall not include -
(I) leasing property to any 5-percent owner or related
person,
(II) use of property provided as compensation for the
performance of services by a 5-percent owner or related
person, or
(III) use of property provided as compensation for the
performance of services by any person not described in
subclause (II) unless an amount is included in the gross
income of such person with respect to such use, and, where
required, there was withholding under chapter 24.
(ii) Special rule for aircraft
Clause (i) shall not apply with respect to any aircraft if
at least 25 percent of the total use of the aircraft during
the taxable year consists of qualified business use not
described in clause (i).
(D) Definitions
For purposes of this paragraph -
(i) 5-percent owner
The term ''5-percent owner'' means any person who is a
5-percent owner with respect to the taxpayer (as defined in
section 416(i)(1)(B)(i)).
(ii) Related person
The term ''related person'' means any person related to the
taxpayer (within the meaning of section 267(b)).
(7) Automobile price inflation adjustment
(A) In general
In the case of any passenger automobile placed in service
after 1988, subsection (a) shall be applied by increasing each
dollar amount contained in such subsection by the automobile
price inflation adjustment for the calendar year in which such
automobile is placed in service. Any increase under the
preceding sentence shall be rounded to the nearest multiple of
$100 (or if the increase is a multiple of $50, such increase
shall be increased to the next higher multiple of $100).
(B) Automobile price inflation adjustment
For purposes of this paragraph -
(i) In general
The automobile price inflation adjustment for any calendar
year is the percentage (if any) by which -
(I) the CPI automobile component for October of the
preceding calendar year, exceeds
(II) the CPI automobile component for October of 1987.
(ii) CPI automobile component
The term ''CPI automobile component'' means the automobile
component of the Consumer Price Index for All Urban Consumers
published by the Department of Labor.
(8) Unrecovered basis
For purposes of subsection (a)(2), the term ''unrecovered
basis'' means the adjusted basis of the passenger automobile
determined after the application of subsection (a) and as if all
use during the recovery period were use in a trade or business
(including the holding of property for the production of income).
(9) All taxpayers holding interests in passenger automobile
treated as 1 taxpayer
All taxpayers holding interests in any passenger automobile
shall be treated as 1 taxpayer for purposes of applying
subsection (a) to such automobile, and the limitations of
subsection (a) shall be allocated among such taxpayers in
proportion to their interests in such automobile.
(10) Special rule for property acquired in nonrecognition
transactions
For purposes of subsection (a)(2) any property acquired in a
nonrecognition transaction shall be treated as a single property
originally placed in service in the taxable year in which it was
placed in service after being so acquired.
(e) Regulations
The Secretary shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of this section,
including regulations with respect to items properly included in,
or excluded from, the adjusted basis of any listed property.
Sources
(Added Pub. L. 98-369, div. A, title I, Sec. 179(a), July 18,
1984, 98 Stat. 713; amended Pub. L. 99-44, Sec. 4, May 24, 1985, 99
Stat. 78; Pub. L. 99-514, title II, Sec. 201(d)(4), title XVIII,
Sec. 1812(e)(1)(A), (C), (2)-(5), Oct. 22, 1986, 100 Stat. 2139,
2836, 2837; Pub. L. 100-647, title I, Sec. 1002(a)(10), (b)(2),
1018(u)(3), Nov. 10, 1988, 102 Stat. 3354, 3357, 3590; Pub. L.
101-239, title VII, Sec. 7643(a), Dec. 19, 1989, 103 Stat. 2381;
Pub. L. 101-508, title XI, Sec. 11813(b)(13)(A)-(E), Nov. 5, 1990,
104 Stat. 1388-554, 1388-555; Pub. L. 104-188, title I, Sec.
1702(h)(5), Aug. 20, 1996, 110 Stat. 1874; Pub. L. 105-34, title
IX, Sec. 971(a), Aug. 5, 1997, 111 Stat. 897; Pub. L. 105-206,
title VI, Sec. 6009(c), July 22, 1998, 112 Stat. 812.)
Miscellaneous
AMENDMENTS
2002 - Pub. L. 107-147, Sec. 602(b)amended Sec. 280F(a)(1)(C)
by adding a new (iii). Sec. 602(b)(2)amended Sec. 971(b)of
the Taxpayer Relief Act of 1997 by striking "and before
January 1, 2005".
1998 - Subsec. (a)(1)(C)(ii). Pub. L. 105-206 substituted
''subparagraphs (A) and (B)'' for ''subparagraph (A)''.
1997 - Subsec. (a)(1)(C). Pub. L. 105-34 added subpar. (C).
1996 - Subsec. (a). Pub. L. 104-188 struck out ''investment tax
credit and'' after ''amount of'' in heading.
1990 - Pub. L. 101-508, Sec. 11813(b)(13)(E), struck out
''investment tax credit and'' after ''Limitation on'' in section
catchline.
Subsec. (a)(1). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i),
redesignated par. (2) as (1) and struck out former par. (1)
''Investment tax credit'' which read as follows: ''The amount of
the credit determined under section 46(a) for any passenger
automobile shall not exceed $675.''
Subsec. (a)(2). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i),
redesignated par. (3) as (2). Former par. (2) redesignated (1).
Subsec. (a)(2)(B). Pub. L. 101-508, Sec. 11813(b)(13)(A)(ii),
struck out ''the credit determined under section 46(a) or'' after
''the amount of''.
Subsec. (a)(3). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i),
redesignated par. (3) as (2).
Subsec. (a)(4). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), struck
out par. (4) ''Special rule where election of reduced credit in
lieu of the basis adjustment'' which read as follows: ''In the case
of any election under section 48(q)(4) with respect to any
passenger automobile, the limitation of paragraph (1) applicable to
such passenger automobile shall be 2/3 of the amount which would be
so applicable but for this paragraph.''
Subsec. (b). Pub. L. 101-508, Sec. 11813(b)(13)(B), redesignated
pars. (2) to (4) as (1) to (3), respectively, and struck out former
par. (1) ''Investment tax credit'' which read as follows: ''For
purposes of this subtitle, any listed property shall not be treated
as section 38 property for any taxable year unless such property is
predominantly used in a qualified business use for such taxable
year.''
Subsec. (c)(1). Pub. L. 101-508, Sec. 11813(b)(13)(C), struck out
''credits and'' after ''Lessor's'' in heading.
Subsec. (d)(3)(A). Pub. L. 101-508, Sec. 11813(b)(13)(D), struck
out ''the amount of any credit allowable under section 38 to the
employee or'' after ''of determining''.
1989 - Subsec. (d)(4)(A)(v), (vi). Pub. L. 101-239 added cl. (v)
and redesignated former cl. (v) as (vi).
1988 - Subsec. (b)(3)(B)(i). Pub. L. 100-647, Sec. 1018(u)(3),
substituted ''depreciation deductions'' for ''recovery
deductions''.
Subsec. (d)(1). Pub. L. 100-647, Sec. 1002(b)(2), substituted
''subsections (a) and (b), and the limitation of paragraph (3) of
this subsection,'' for ''subsections (a) and (b)''.
Subsec. (d)(3)(A). Pub. L. 100-647, Sec. 1002(a)(10), substituted
''depreciation deduction'' for ''recovery deduction''.
1986 - Subsec. (a)(2)(A). Pub. L. 99-514, Sec. 201(d)(4)(A)(i),
(K), substituted ''depreciation deduction'' for ''recovery
deduction'' in introductory provisions and substituted cls. (i) to
(iv) for former cls. (i) and (ii) which read as follows:
''(i) $3,200 for the first taxable year in the recovery period,
and
''(ii) $4,800 for each succeeding taxable year in the recovery
period.''
Subsec. (a)(2)(B). Pub. L. 99-514, Sec. 201(d)(4)(A)(ii), (K),
substituted ''$1,475'' for ''$4,800'' in heading and text of cl.
(ii), and ''depreciation deduction'' for ''recovery deduction'' in
heading and text of cl. (iv).
Subsec. (a)(3)(B). Pub. L. 99-514, Sec. 201(d)(4)(K), substituted
''depreciation deduction'' for ''recovery deduction'' in two
places.
Subsec. (b)(2). Pub. L. 99-514, Sec. 201(d)(4)(J), substituted
''section 168(g) (relating to alternative depreciation system)''
for ''the straight line method over the earnings and profits life
for such property''.
Subsec. (b)(3)(A). Pub. L. 99-514, Sec. 201(d)(4)(B), (K),
substituted ''depreciation deduction'' for ''recovery deduction''
and ''section 168(g) (relating to alternative depreciation
system)'' for ''the straight line method over the earnings and
profits life'' in closing provisions.
Subsec. (b)(4). Pub. L. 99-514, Sec. 201(d)(4)(C), in amending
par. (4) generally, struck out heading ''Definitions'',
redesignated as par. (4) former subpar. (A) heading and text,
substituted ''For purposes of this section, property'' for
''Property'', and struck out former subpar. (B) definition of
straight line method over earnings and profits life.
Subsec. (c)(4). Pub. L. 99-514, Sec. 201(d)(4)(D), substituted
''section 168(i)(3)(A)'' for ''section 168(j)(6)(B)''.
Subsec. (d)(1). Pub. L. 99-514, Sec. 201(d)(4)(E), substituted
''depreciation deduction'' for ''recovery deduction''.
Subsec. (d)(2). Pub. L. 99-514, Sec. 1812(e)(5), substituted ''is
use described in'' for ''is not use described in''.
Pub. L. 99-514, Sec. 201(d)(4)(F), substituted ''depreciation
deduction'' for ''recovery deduction'' and ''use in a trade or
business (including the holding for the production of income)'' for
''use described in section 168(c)(1) (defining recovery
property)''.
Subsec. (d)(3)(A). Pub. L. 99-514, Sec. 1812(e)(2), inserted
''(or the amount of any deduction allowable to the employee for
rentals or other payments under a lease of listed property)''.
Subsec. (d)(4)(A)(iv). Pub. L. 99-514, Sec. 201(d)(4)(G),
substituted ''section 168(i)(2)(B)'' for ''section 168(j)(5)(D)''.
Subsec. (d)(4)(B). Pub. L. 99-514, Sec. 1812(e)(3), inserted
''and owned or leased by the person operating such establishment''.
Subsec. (d)(4)(C). Pub. L. 99-514, Sec. 1812(e)(4), added subpar.
(C).
Subsec. (d)(5)(A). Pub. L. 99-514, Sec. 1812(e)(1)(A), (C),
substituted ''unloaded gross vehicle weight'' for ''gross vehicle
weight'' in cl. (ii) and inserted at end ''In the case of a truck
or van, clause (ii) shall be applied by substituting 'gross vehicle
weight' for 'unloaded gross vehicle weight'.''
Subsec. (d)(8). Pub. L. 99-514, Sec. 201(d)(4)(H), amended par.
(8) generally. Prior to amendment, par. (8) read as follows: ''For
purposes of subsection (a)(2), the term ''unrecovered basis'' means
the excess (if any) of -
''(A) the unadjusted basis (as defined in section 168(d)(1)(A))
of the passenger automobile, over
''(B) the amount of the recovery deductions which would have
been allowable for taxable years in the recovery period
determined after the application of subsection (a) and as if all
use during the recovery period were use described in section
168(c)(1).''
Subsec. (d)(10). Pub. L. 99-514, Sec. 201(d)(4)(I), struck out
'', notwithstanding any regulations prescribed under section
168(f)(7),'' after ''For purposes of subsection (a)(2)''.
1985 - Subsec. (a)(1). Pub. L. 99-44, Sec. 4(a)(1), substituted
''$675'' for ''$1,000''.
Subsec. (a)(2)(A)(i). Pub. L. 99-44, Sec. 4(a)(2)(A), substituted
''$3,200'' for ''$4,000''.
Subsec. (a)(2)(A)(ii), (B)(ii). Pub. L. 99-44, Sec. 4(a)(2)(B),
substituted ''$4,800'' for ''$6,000'' wherever appearing in text
and heading.
Subsec. (d)(7)(A). Pub. L. 99-44, Sec. 4(b)(1), inserted ''placed
in service after 1988'' after ''passenger automobile''.
Subsec. (d)(7)(B)(i). Pub. L. 99-44, Sec. 4(b)(3), struck out
last sentence which directed that in the case of calendar year
1984, the automobile price inflation adjustment would be zero.
Subsec. (d)(7)(B)(i)(II). Pub. L. 99-44, Sec. 4(b)(2),
substituted ''1987'' for ''1983''.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 971(b) of Pub. L. 105-34 provided that: ''The amendments
made by this section (amending this section) shall apply to
property placed in service after the date of enactment of this Act
(Aug. 5, 1997) and before January 1, 2005.''
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-188 effective, except as otherwise
expressly provided, as if included in the provision of the Revenue
Reconciliation Act of 1990, Pub. L. 101-508, title XI, to which
such amendment relates, see section 1702(i) of Pub. L. 104-188, set
out as a note under section 38 of this title.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable to property placed in
service after Dec. 31, 1990, but not applicable to any transition
property (as defined in section 49(e) of this title), any property
with respect to which qualified progress expenditures were
previously taken into account under section 46(d) of this title,
and any property described in section 46(b)(2)(C) of this title, as
such sections were in effect on Nov. 4, 1990, see section 11813(c)
of Pub. L. 101-508, set out as a note under section 29 of this
title.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 7643(b) of Pub. L. 101-239 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
property placed in service or leased in taxable years beginning
after December 31, 1989.''
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 201(d)(4) of Pub. L. 99-514 applicable to
property placed in service after Dec. 31, 1986, in taxable years
ending after such date, with exceptions, see sections 203 and 204
of Pub. L. 99-514, set out as a note under section 168 of this
title.
Amendment by section 201(d)(4) of Pub. L. 99-514 not applicable
to any property placed in service before Jan. 1, 1994, if such
property placed in service as part of specified rehabilitations,
and not applicable to certain additional rehabilitations, see
section 251(d)(2), (3) of Pub. L. 99-514, set out as a note under
section 46 of this title.
Amendment by section 1812(e)(1)(A), (C), (2)-(5) of Pub. L.
99-514 effective, except as otherwise provided, as if included in
the provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div.
A, to which such amendment relates, see section 1881 of Pub. L.
99-514, set out as a note under section 48 of this title.
EFFECTIVE DATE OF 1985 AMENDMENT
Section 6(e) of Pub. L. 99-44 provided that:
''(1) Except as provided in paragraph (2), the amendments made by
section 4 (amending this section) shall apply to -
''(A) property placed in service after April 2, 1985, in
taxable years ending after such date, and
''(B) property leased after April 2, 1985, in taxable years
ending after such date.
''(2) The amendments made by section 4 (amending this section)
shall not apply to any property -
''(A) acquired by the taxpayer pursuant to a binding contract
in effect on April 1, 1985, and at all times thereafter, but only
if the property is placed in service before August 1, 1985, or
''(B) of which the taxpayer is the lessee, but only if the
lease is pursuant to a binding contract in effect on April 1,
1985, and at all times thereafter, and only if the taxpayer first
uses such property under the lease before August 1, 1985.''
EFFECTIVE DATE
Section 179(d) of Pub. L. 98-369 provided that:
''(1) In general. -
''(A) Except as provided in subparagraph (B), the amendments
made by subsections (a) and (c) (enacting this section) shall
apply to -
''(i) property placed in service after June 18, 1984, in
taxable years ending after such date, and
''(ii) property leased after June 18, 1984, in taxable years
ending after such date.
''(B) The amendments made by subsections (a) and (c) shall not
apply to any property -
''(i) acquired by the taxpayer pursuant to a binding contract
in effect on June 18, 1984, and at all times thereafter (or
under construction on such date) but only if the property is
placed in service before January 1, 1985 (January 1, 1987, in
the case of 15-year real property), or
''(ii) of which the taxpayer is the lessee but only if the
lease is pursuant to a binding contract in effect on June 18,
1984, and at all times thereafter and only if the taxpayer
first uses such property under the lease before January 1, 1985
(January 1, 1987, in the case of 15-year real property).
For purposes of the preceding sentence, the term '15-year real
property' includes 18-year real property.
''(2) Compliance provisions. - The amendments made by subsection
(b) (amending sections 274, 6653, and 6695 of this title) shall
apply to taxable years beginning after December 31, 1984.''
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
any plan, such plan amendment shall not be required to be made
before the first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99-514, as amended, set out as a note under
section 401 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 168, 274 of this title.
