II 

112TH CONGRESS 

1ST SESSION S. 1873 

To amend the Internal Revenue Code of 1986 to extend for 1 year the 

allowance for bonus depreciation and the increased expensing limitations 

for depreciable business assets. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 15, 2011 

Mr. LUGAR 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 

for 1 year the allowance for bonus depreciation and 

the increased expensing limitations for depreciable business assets. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bonus Depreciation 

5 and Small Business Expense Extension Act’’. 


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•S 1873 IS

1 SEC. 2. EXTENSION OF BONUS DEPRECIATION; TEMPORARY 

2 100 PERCENT EXPENSING FOR CERTAIN BUSI3 NESS ASSETS. 

4 (a) IN GENERAL.—Paragraph (2) of section 168(k) 

5 of the Internal Revenue Code of 1986 is amended— 

6 (1) by striking ‘‘January 1, 2014’’ in subpara7 graph (A)(iv) and inserting ‘‘January 1, 2015’’, and 

8 (2) by striking ‘‘January 1, 2013’’ each place 

9 it appears and inserting ‘‘January 1, 2014’’. 

10 (b) TEMPORARY 100 PERCENT EXPENSING.—Para11 graph (5) of section 168(k) of the Internal Revenue Code 

12 of 1986 is amended— 

13 (1) by striking ‘‘2013’’ and inserting ‘‘2014’’, 

14 and 

15 (2) by striking ‘‘2012’’ each place it appears in 

16 the text and heading and inserting ‘‘2013’’. 

17 (c) EXTENSION OF ELECTION TO ACCELERATE THE

18 AMT CREDIT IN LIEU OF BONUS DEPRECIATION.— 

19 (1) IN GENERAL.—Subclause (II) of section 

20 168(k)(4)(D)(iii) of the Internal Revenue Code of 

21 1986 is amended by striking ‘‘2013’’ and inserting 

22 ‘‘2014’’. 

23 (2) ROUND 3 EXTENSION PROPERTY.—Para24 graph (4) of section 168(k) of such Code is amended 

25 by adding at the end the following new subpara26 graph: 


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1 ‘‘(J) SPECIAL RULES FOR ROUND 3 EX2 TENSION PROPERTY.— 

3 ‘‘(i) IN GENERAL.—In the case of 

4 round 3 extension property, this paragraph 

5 shall be applied without regard to— 

6 ‘‘(I) the limitation described in 

7 subparagraph (B)(i) thereof, and 

8 ‘‘(II) the business credit increase 

9 amount under subparagraph (E)(iii) 

10 thereof. 

11 ‘‘(ii) TAXPAYERS PREVIOUSLY ELECT12 ING ACCELERATION.—In the case of a tax13 payer who made the election under sub14 paragraph (A) for its first taxable year 

15 ending after March 31, 2008, a taxpayer 

16 who made the election under subparagraph 

17 (H)(ii) for its first taxable year ending 

18 after December 31, 2008, or a taxpayer 

19 who made the election under subparagraph 

20 (I)(iii) for its first taxable year ending 

21 after December 31, 2010— 

22 ‘‘(I) the taxpayer may elect not 

23 to have this paragraph apply to round 

24 3 extension property, but 


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1 ‘‘(II) if the taxpayer does not 

2 make the election under subclause (I), 

3 in applying this paragraph to the tax4 payer the bonus depreciation amount, 

5 maximum amount, and maximum in6 crease amount shall be computed and 

7 applied to eligible qualified property 

8 which is round 3 extension property. 

9 The amounts described in subclause (II) 

10 shall be computed separately from any 

11 amounts computed with respect to eligible 

12 qualified property which is not round 2 ex13 tension property. 

14 ‘‘(iii) TAXPAYERS NOT PREVIOUSLY

15 ELECTING ACCELERATION.—In the case of 

16 a taxpayer who neither made the election 

17 under subparagraph (A) for its first tax18 able year ending after March 31, 2008, 

19 nor made the election under subparagraph 

20 (H)(ii) for its first taxable year ending 

21 after December 31, 2008, nor made the 

22 election under subparagraph (I)(iii) for its 

23 first taxable year ending after December 

24 31, 2010— 


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1 ‘‘(I) the taxpayer may elect to 

2 have this paragraph apply to its first 

3 taxable year ending after December 

4 31, 2011, and each subsequent tax5 able year, and 

6 ‘‘(II) if the taxpayer makes the 

7 election under subclause (I), this 

8 paragraph shall only apply to eligible 

9 qualified property which is round 3 

10 extension property. 

11 ‘‘(iv) ROUND 3 EXTENSION PROP12 ERTY.—For purposes of this subpara13 graph, the term ‘round 3 extension prop14 erty’ means property which is eligible 

15 qualified property solely by reason of the 

16 extension of the application of the special 

17 allowance under paragraph (1) pursuant to 

18 the amendments made by section 2(a) of 

19 the Bonus Depreciation and Small Busi20 ness Expense Extension Act (and the ap21 plication of such extension to this para22 graph pursuant to the amendment made 

23 by section 2(c)(1) of such Act).’’. 

24 (d) CONFORMING AMENDMENTS.— 


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•S 1873 IS

1 (1) The heading for subsection (k) of section 

2 168 of the Internal Revenue Code of 1986 is amend3 ed by striking ‘‘JANUARY 1, 2013’’ and inserting 

4 ‘‘JANUARY 1, 2014’’. 

5 (2) The heading for clause (ii) of section 

6 168(k)(2)(B) of such Code is amended by striking 

7 ‘‘PRE-JANUARY 1, 2013’’ and inserting ‘‘PRE-JANU8 ARY 1, 2014’’. 

9 (3) Paragraph (5) of section 168(l) of such 

10 Code is amended— 

11 (A) by striking ‘‘and’’ at the end of sub12 paragraph (A), 

13 (B) by redesignating subparagraph (C) as 

14 subparagraph (B), and 

15 (C) by inserting after subparagraph (A) 

16 the following new subparagraph: 

17 ‘‘(B) by substituting ‘January 1, 2013’ for 

18 ‘January 1, 2014’ in clause (i) thereof, and’’. 

19 (4) Subparagraph (C) of section 168(n)(2) of 

20 such Code is amended by striking ‘‘January 1, 

21 2013’’ and inserting ‘‘January 1, 2014’’. 

22 (5) Subparagraph (D) of section 1400L(b)(2) 

23 of such Code is amended by striking ‘‘January 1, 

24 2013’’ and inserting ‘‘January 1, 2014’’. 


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1 (6) Subparagraph (B) of section 1400N(d)(3) 

2 of such Code is amended by striking ‘‘January 1, 

3 2013’’ and inserting ‘‘January 1, 2014’’. 

4 (e) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to property placed in service after 

6 December 31, 2011, in taxable years ending after such 

7 date. 

8 SEC. 3. EXTENSION OF INCREASED EXPENSING LIMITA9 TIONS FOR CERTAIN DEPRECIABLE BUSI10 NESS ASSETS AND TREATMENT OF CERTAIN 

11 REAL PROPERTY AS SECTION 179 PROPERTY. 

12 (a) IN GENERAL.—Section 179(b) of the Internal 

13 Revenue Code of 1986 is amended— 

14 (1) by striking ‘‘2010 or 2011’’ each place it 

15 appears in paragraph (1)(B) and (2)(B) and insert16 ing ‘‘2010, 2011, or 2012’’, 

17 (2) by striking ‘‘2012’’ each place it appears in 

18 paragraph (1)(C) and (2)(C) and inserting ‘‘2013’’, 

19 and 

20 (3) by striking ‘‘2012’’ each place it appears in 

21 paragraph (1)(D) and (2)(D) and inserting ‘‘2013’’. 

22 (b) INFLATION ADJUSTMENT.—Subparagraph (A) of 

23 section 179(b)(6) of the Internal Revenue Code of 1986 

24 is amended by striking ‘‘2012’’ and inserting ‘‘2013’’. 


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•S 1873 IS

1 (c) COMPUTER SOFTWARE.—Section 179(d)(1)(A)(ii) 

2 of the Internal Revenue Code of 1986 is amended by strik3 ing ‘‘2013’’ and inserting ‘‘2014’’. 

4 (d) ELECTION.—Section 179(c)(2) of the Internal 

5 Revenue Code of 1986 is amended by striking ‘‘2013’’ and 

6 inserting ‘‘2014’’. 

7 (e) SPECIAL RULES FOR TREATMENT OF QUALIFIED

8 REAL PROPERTY.—Section 179(f)(1) of the Internal Rev9 enue Code of 1986 is amended by striking ‘‘2010 or 2011’’ 

10 and inserting ‘‘2010, 2011, or 2012’’. 

11 (f) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 December 31, 2011. 

Æ 


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