Bonus Depreciation Extension Act of 2014

Summary: Bonus Depreciation Extension Act of 2014 - Amends the Internal Revenue Code to extend: (1) through 2015, the additional 50% depreciation allowance (bonus depreciation) for business property (through 2016, for property having longer production periods and for transportation property); and (2) the election to increase the alternative minimum tax (AMT) credit in lieu of bonus depreciation by extending to January 1, 2016, the placed-in-service requirement for property eligible for such election (January 1, 2017, for property having longer production periods and for transportation property).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bonus Depreciation Extension Act of 
2014''.

SEC. 2. EXTENSION OF BONUS DEPRECIATION.

    (a) In General.--Paragraph (2) of section 168(k) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``January 1, 2015'' in subparagraph (A)(iv) 
        and inserting ``January 1, 2017'', and
            (2) by striking ``January 1, 2014'' each place it appears 
        and inserting ``January 1, 2016''.
    (b) Special Rule for Federal Long-Term Contracts.--Clause (ii) of 
section 460(c)(6)(B) of such Code is amended by striking ``January 1, 
2014 (January 1, 2015'' and inserting ``January 1, 2016 (January 1, 
2017''.
    (c) Expansion of Election To Accelerate AMT Credits in Lieu of 
Bonus Depreciation.--Section 168(k)(4) 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) paragraphs (1) and (2)(F)(i) shall 
                        not apply for such taxable year,
                            ``(ii) the applicable depreciation method 
                        used under this section with respect to any 
                        qualified 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 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 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, 2013, 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, 2014 
                                (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) 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).
                    ``(D) 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 which 
                        is a partner in a partnership and which makes 
                        an election under subparagraph (A) for the 
                        taxable year, for purposes of determining such 
                        corporation's distributive share of partnership 
                        items under section 702 for such taxable year--
                                    ``(I) paragraphs (1)(A) and 
                                (2)(F)(i) shall not apply, and
                                    ``(II) the applicable depreciation 
                                method used under this section with 
                                respect to any qualified 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 1 corporation (or by 
                        corporations treated as 1 taxpayer under 
                        subparagraph (B)(iii)), each partner shall 
                        compute its bonus depreciation amount under 
                        clause (i) of subparagraph (B) by taking into 
                        account its distributive share of the amounts 
                        determined by the partnership under subclauses 
                        (I) and (II) of such clause for the taxable 
                        year of the partnership ending with or within 
                        the taxable year of the partner.
                            ``(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 subparagraph 
                        (B)(i)(I).''.
    (d) Conforming Amendments.--
            (1) The heading for subsection (k) of section 168 of such 
        Code is amended by striking ``January 1, 2014'' and inserting 
        ``January 1, 2016''.
            (2) The heading for clause (ii) of section 168(k)(2)(B) of 
        such Code is amended by striking ``pre-january 1, 2014'' and 
        inserting ``pre-january 1, 2016''.
            (3) Subparagraph (C) of section 168(n)(2) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2016''.
            (4) Subparagraph (D) of section 1400L(b)(2) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2016''.
            (5) Subparagraph (B) of section 1400N(d)(3) of such Code is 
        amended by striking ``January 1, 2014'' and inserting ``January 
        1, 2016''.
    (e) Technical Amendment Relating to Section 331 of the American 
Taxpayer Relief Act of 2012.--Clause (iii) of section 168(k)(4)(J) of 
such Code is amended by striking ``any taxable year'' and inserting 
``its first taxable year''.
    (f) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this subsection shall apply 
        to property placed in service after December 31, 2013.
            (2) Expansion of election to accelerate amt credits in lieu 
        of bonus depreciation.--
                    (A) In general.--The amendment made by subsection 
                (c) (other than so much of such amendment as relates to 
                section 168(k)(4)(D)(iii) of such Code, as added by 
                such amendment) shall apply to taxable years ending 
                after December 31, 2013.
                    (B) Transitional rule.--In the case of a taxable 
                year beginning before January 1, 2014, and ending after 
                December 31, 2013, the bonus depreciation amount 
                determined under section 168(k)(4) of such Code for 
                such year shall be the sum of--
                            (i) such amount determined without regard 
                        to the amendments made by this section and--
                                    (I) by taking into account only 
                                property placed in service before 
                                January 1, 2014, and
                                    (II) by multiplying the limitation 
                                under section 168(k)(4)(C)(ii) of such 
                                Code (determined without regard to the 
                                amendments made by this section) by a 
                                fraction the numerator of which is the 
                                number of days in the taxable year 
                                before January 1, 2014, and the 
                                denominator of which is the number of 
                                days in the taxable year, and
                            (ii) such amount determined after taking 
                        into account the amendments made by this 
                        section and--
                                    (I) by taking into account only 
                                property placed in service after 
                                December 31, 2013, and
                                    (II) by multiplying the limitation 
                                under section 168(k)(4)(B)(ii) of such 
                                Code (as amended by this section) by a 
                                fraction the numerator of which is the 
                                number of days in the taxable year 
                                after December 31, 2013, and the 
                                denominator of which is the number of 
                                days in the taxable year.
            (3) Technical amendment.--The amendment made by subsection 
        (e) shall take effect as if included in the provision of the 
        American Taxpayer Relief Act of 2012 to which it relates.