II 

Calendar No. 465 

113TH CONGRESS 

2D SESSION H. R. 4718 

IN THE SENATE OF THE UNITED STATES 

JULY 14, 2014 

Received; read the first time 

JULY 15, 2014 

Read the second time and placed on the calendar 

AN ACT 

To amend the Internal Revenue Code of 1986 to modify 

and make permanent bonus depreciation. 

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

3 SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE 

4 PERMANENT. 

5 (a) MADE PERMANENT; INCLUSION OF QUALIFIED

6 RETAIL IMPROVEMENT PROPERTY.—Section 168(k)(2) of 

7 the Internal Revenue Code of 1986 is amended to read 

8 as follows: 

9 ‘‘(2) QUALIFIED PROPERTY.—For purposes of 

10 this subsection— 


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1 ‘‘(A) IN GENERAL.—The term ‘qualified 

2 property’ means property— 

3 ‘‘(i)(I) to which this section applies 

4 which has a recovery period of 20 years or 

5 less, 

6 ‘‘(II) which is computer software (as 

7 defined in section 167(f)(1)(B)) for which 

8 a deduction is allowable under section 

9 167(a) without regard to this subsection, 

10 ‘‘(III) which is water utility property, 

11 ‘‘(IV) which is qualified leasehold im12 provement property, or 

13 ‘‘(V) which is qualified retail improve14 ment property, and 

15 ‘‘(ii) the original use of which com16 mences with the taxpayer. 

17 ‘‘(B) EXCEPTION FOR ALTERNATIVE DE18 PRECIATION PROPERTY.—The term ‘qualified 

19 property’ shall not include any property to 

20 which the alternative depreciation system under 

21 subsection (g) applies, determined— 

22 ‘‘(i) without regard to paragraph (7) 

23 of subsection (g) (relating to election to 

24 have system apply), and 


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1 ‘‘(ii) after application of section 

2 280F(b) (relating to listed property with 

3 limited business use). 

4 ‘‘(C) SPECIAL RULES.— 

5 ‘‘(i) SALE-LEASEBACKS.—For pur6 poses of clause (ii) and subparagraph 

7 (A)(ii), if property is— 

8 ‘‘(I) originally placed in service 

9 by a person, and 

10 ‘‘(II) sold and leased back by 

11 such person within 3 months after the 

12 date such property was originally 

13 placed in service, 

14 such property shall be treated as originally 

15 placed in service not earlier than the date 

16 on which such property is used under the 

17 leaseback referred to in subclause (II). 

18 ‘‘(ii) SYNDICATION.—For purposes of 

19 subparagraph (A)(ii), if— 

20 ‘‘(I) property is originally placed 

21 in service by the lessor of such prop22 erty, 

23 ‘‘(II) such property is sold by 

24 such lessor or any subsequent pur25 chaser within 3 months after the date 


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1 such property was originally placed in 

2 service (or, in the case of multiple 

3 units of property subject to the same 

4 lease, within 3 months after the date 

5 the final unit is placed in service, so 

6 long as the period between the time 

7 the first unit is placed in service and 

8 the time the last unit is placed in 

9 service does not exceed 12 months), 

10 and 

11 ‘‘(III) the user of such property 

12 after the last sale during such 3- 

13 month period remains the same as 

14 when such property was originally 

15 placed in service, 

16 such property shall be treated as originally 

17 placed in service not earlier than the date 

18 of such last sale. 

19 ‘‘(D) COORDINATION WITH SECTION

20 280F.—For purposes of section 280F— 

21 ‘‘(i) AUTOMOBILES.—In the case of a 

22 passenger automobile (as defined in section 

23 280F(d)(5)) which is qualified property, 

24 the Secretary shall increase the limitation 

25 under section 280F(a)(1)(A)(i) by $8,000. 


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1 ‘‘(ii) LISTED PROPERTY.—The deduc2 tion allowable under paragraph (1) shall be 

3 taken into account in computing any re4 capture amount under section 280F(b)(2). 

5 ‘‘(iii) INFLATION ADJUSTMENT.—In 

6 the case of any taxable year beginning in 

7 a calendar year after 2014, the $8,000 

8 amount in clause (i) shall be increased by 

9 an amount equal to— 

10 ‘‘(I) such dollar amount, multi11 plied by 

12 ‘‘(II) the automobile price infla13 tion adjustment determined under sec14 tion 280F(d)(7)(B)(i) for the calendar 

15 year in which such taxable year begins 

16 by substituting ‘2013’ for ‘1987’ in 

17 subclause (II) thereof. 

18 If any increase under the preceding sen19 tence is not a multiple of $100, such in20 crease shall be rounded to the nearest mul21 tiple of $100. 

22 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

23 MINIMUM TAX.—For purposes of determining 

24 alternative minimum taxable income under sec25 tion 55, the deduction under section 167 for 


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1 qualified property shall be determined without 

2 regard to any adjustment under section 56.’’. 

3 (b) EXPANSION OF ELECTION TO ACCELERATE AMT

4 CREDITS IN LIEU OF BONUS DEPRECIATION.—Section 

5 168(k)(4) of such Code is amended to read as follows: 

6 ‘‘(4) ELECTION TO ACCELERATE AMT CREDITS

7 IN LIEU OF BONUS DEPRECIATION.— 

8 ‘‘(A) IN GENERAL.—If a corporation elects 

9 to have this paragraph apply for any taxable 

10 year— 

11 ‘‘(i) paragraphs (1)(A), (2)(D)(i), and 

12 (5)(A)(i) shall not apply for such taxable 

13 year, 

14 ‘‘(ii) the applicable depreciation meth15 od used under this section with respect to 

16 any qualified property shall be the straight 

17 line method, and 

18 ‘‘(iii) the limitation imposed by section 

19 53(c) for such taxable year shall be in20 creased by the bonus depreciation amount 

21 which is determined for such taxable year 

22 under subparagraph (B). 

23 ‘‘(B) BONUS DEPRECIATION AMOUNT.— 

24 For purposes of this paragraph— 


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1 ‘‘(i) IN GENERAL.—The bonus depre2 ciation amount for any taxable year is an 

3 amount equal to 20 percent of the excess 

4 (if any) of— 

5 ‘‘(I) the aggregate amount of de6 preciation which would be allowed 

7 under this section for qualified prop8 erty placed in service by the taxpayer 

9 during such taxable year if paragraph 

10 (1) applied to all such property, over 

11 ‘‘(II) the aggregate amount of 

12 depreciation which would be allowed 

13 under this section for qualified prop14 erty placed in service by the taxpayer 

15 during such taxable year if paragraph 

16 (1) did not apply to any such prop17 erty. 

18 The aggregate amounts determined under 

19 subclauses (I) and (II) shall be determined 

20 without regard to any election made under 

21 subsection (b)(2)(D), (b)(3)(D), or (g)(7) 

22 and without regard to subparagraph 

23 (A)(ii). 


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1 ‘‘(ii) LIMITATION.—The bonus depre2 ciation amount for any taxable year shall 

3 not exceed the lesser of— 

4 ‘‘(I) 50 percent of the minimum 

5 tax credit under section 53(b) for the 

6 first taxable year ending after Decem7 ber 31, 2013, or 

8 ‘‘(II) the minimum tax credit 

9 under section 53(b) for such taxable 

10 year determined by taking into ac11 count only the adjusted net minimum 

12 tax for taxable years ending before 

13 January 1, 2014 (determined by 

14 treating credits as allowed on a first15 in, first-out basis). 

16 ‘‘(iii) AGGREGATION RULE.—All cor17 porations which are treated as a single em18 ployer under section 52(a) shall be treat19 ed— 

20 ‘‘(I) as 1 taxpayer for purposes 

21 of this paragraph, and 

22 ‘‘(II) as having elected the appli23 cation of this paragraph if any such 

24 corporation so elects. 


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1 ‘‘(C) CREDIT REFUNDABLE.—For pur2 poses of section 6401(b), the aggregate increase 

3 in the credits allowable under part IV of sub4 chapter A for any taxable year resulting from 

5 the application of this paragraph shall be treat6 ed as allowed under subpart C of such part 

7 (and not any other subpart). 

8 ‘‘(D) OTHER RULES.— 

9 ‘‘(i) ELECTION.—Any election under 

10 this paragraph may be revoked only with 

11 the consent of the Secretary. 

12 ‘‘(ii) PARTNERSHIPS WITH ELECTING

13 PARTNERS.—In the case of a corporation 

14 which is a partner in a partnership and 

15 which makes an election under subpara16 graph (A) for the taxable year, for pur17 poses of determining such corporation’s 

18 distributive share of partnership items 

19 under section 702 for such taxable year— 

20 ‘‘(I) paragraphs (1)(A), 

21 (2)(D)(i), and (5)(A)(i) shall not 

22 apply, and 

23 ‘‘(II) the applicable depreciation 

24 method used under this section with 


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1 respect to any qualified property shall 

2 be the straight line method. 

3 ‘‘(iii) CERTAIN PARTNERSHIPS.—In 

4 the case of a partnership in which more 

5 than 50 percent of the capital and profits 

6 interests are owned (directly or indirectly) 

7 at all times during the taxable year by 1 

8 corporation (or by corporations treated as 

9 1 taxpayer under subparagraph (B)(iii)), 

10 each partner shall compute its bonus de11 preciation amount under clause (i) of sub12 paragraph (B) by taking into account its 

13 distributive share of the amounts deter14 mined by the partnership under subclauses 

15 (I) and (II) of such clause for the taxable 

16 year of the partnership ending with or 

17 within the taxable year of the partner.’’. 

18 (c) SPECIAL RULES FOR TREES AND VINES BEARING

19 FRUITS AND NUTS.—Section 168(k) of such Code is 

20 amended— 

21 (1) by striking paragraph (5), and 

22 (2) by inserting after paragraph (4) the fol23 lowing new paragraph: 

24 ‘‘(5) SPECIAL RULES FOR TREES AND VINES

25 BEARING FRUITS AND NUTS.— 


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1 ‘‘(A) IN GENERAL.—In the case of any 

2 tree or vine bearing fruits or nuts which is 

3 planted, or is grafted to a plant that has al4 ready been planted, by the taxpayer in the ordi5 nary course of the taxpayer’s farming business 

6 (as defined in section 263A(e)(4))— 

7 ‘‘(i) a depreciation deduction equal to 

8 50 percent of the adjusted basis of such 

9 tree or vine shall be allowed under section 

10 167(a) for the taxable year in which such 

11 tree or vine is so planted or grafted, and 

12 ‘‘(ii) the adjusted basis of such tree or 

13 vine shall be reduced by the amount of 

14 such deduction. 

15 ‘‘(B) ELECTION OUT.—If a taxpayer 

16 makes an election under this subparagraph for 

17 any taxable year, this paragraph shall not apply 

18 to any tree or vine planted or grafted during 

19 such taxable year. An election under this sub20 paragraph may be revoked only with the con21 sent of the Secretary. 

22 ‘‘(C) ADDITIONAL DEPRECIATION MAY BE

23 CLAIMED ONLY ONCE.—If this paragraph ap24 plies to any tree or vine, such tree or vine shall 


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1 not be treated as qualified property in the tax2 able year in which placed in service. 

3 ‘‘(D) COORDINATION WITH ELECTION TO

4 ACCELERATE AMT CREDITS.—If a corporation 

5 makes an election under paragraph (4) for any 

6 taxable year, the amount under paragraph 

7 (4)(B)(i)(I) for such taxable year shall be in8 creased by the amount determined under sub9 paragraph (A)(i) for such taxable year. 

10 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

11 MINIMUM TAX.—Rules similar to the rules of 

12 paragraph (2)(E) shall apply for purposes of 

13 this paragraph.’’. 

14 (d) CONFORMING AMENDMENTS.— 

15 (1) Section 168(e)(8) of such Code is amended 

16 by striking subparagraph (D). 

17 (2) Section 168(k) of such Code is amended by 

18 adding at the end the following new paragraph: 

19 ‘‘(6) ELECTION OUT.—If a taxpayer makes an 

20 election under this paragraph with respect to any 

21 class of property for any taxable year, this sub22 section shall not apply to all property in such class 

23 placed in service (or, in the case of paragraph (5), 

24 planted or grafted) during such taxable year. An 


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1 election under this paragraph may be revoked only 

2 with the consent of the Secretary.’’. 

3 (3) Section 168(l)(5) of such Code is amended 

4 by striking ‘‘section 168(k)(2)(G)’’ and inserting 

5 ‘‘section 168(k)(2)(E)’’. 

6 (4) Section 263A(c) of such Code is amended 

7 by adding at the end the following new paragraph: 

8 ‘‘(7) COORDINATION WITH SECTION

9 168(k)(5).—This section shall not apply to any 

10 amount allowable as a deduction by reason of section 

11 168(k)(5) (relating to special rules for trees and 

12 vines bearing fruits and nuts).’’. 

13 (5) Section 460(c)(6)(B) of such Code is 

14 amended by striking ‘‘which—’’ and all that follows 

15 and inserting ‘‘which has a recovery period of 7 

16 years or less.’’. 

17 (6) Section 168(k) of such Code is amended by 

18 striking ‘‘ACQUIRED AFTER DECEMBER 31, 2007, 

19 AND BEFORE JANUARY 1, 2014’’ in the heading 

20 thereof. 

21 (e) EFFECTIVE DATES.— 

22 (1) IN GENERAL.—Except as otherwise pro23 vided in this subsection, the amendments made by 

24 this section shall apply to property placed in service 

25 after December 31, 2013. 


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1 (2) EXPANSION OF ELECTION TO ACCELERATE

2 AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 

3 (A) IN GENERAL.—The amendment made 

4 by subsection (b) (other than so much of such 

5 amendment as relates to section 

6 168(k)(4)(D)(iii) of such Code, as added by 

7 such amendment) shall apply to taxable years 

8 ending after December 31, 2013. 

9 (B) TRANSITIONAL RULE.—In the case of 

10 a taxable year beginning before January 1, 

11 2014, and ending after December 31, 2013, the 

12 bonus depreciation amount determined under 

13 section 168(k)(4) of such Code for such year 

14 shall be the sum of— 

15 (i) such amount determined without 

16 regard to the amendments made by this 

17 section and— 

18 (I) by taking into account only 

19 property placed in service before Jan20 uary 1, 2014, and 

21 (II) by multiplying the limitation 

22 under section 168(k)(4)(C)(ii) of such 

23 Code (determined without regard to 

24 the amendments made by this section) 

25 by a fraction the numerator of which 


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1 is the number of days in the taxable 

2 year before January 1, 2014, and the 

3 denominator of which is the number 

4 of days in the taxable year, and 

5 (ii) such amount determined after 

6 taking into account the amendments made 

7 by this section and— 

8 (I) by taking into account only 

9 property placed in service after De10 cember 31, 2013, and 

11 (II) by multiplying the limitation 

12 under section 168(k)(4)(B)(ii) of such 

13 Code (as amended by this section) by 

14 a fraction the numerator of which is 

15 the number of days in the taxable 

16 year after December 31, 2013, and 

17 the denominator of which is the num18 ber of days in the taxable year. 

19 (3) SPECIAL RULES FOR CERTAIN TREES AND

20 VINES.—The amendment made by subsection (c)(2) 

21 shall apply to trees and vines planted or grafted 

22 after December 31, 2013. 

23 SEC. 2. BUDGETARY EFFECTS. 

24 (a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 

25 budgetary effects of this Act shall not be entered on either 


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1 PAYGO scorecard maintained pursuant to section 4(d) of 

2 the Statutory Pay-As-You-Go Act of 2010. 

3 (b) SENATE PAYGO SCORECARDS.—The budgetary 

4 effects of this Act shall not be entered on any PAYGO 

5 scorecard maintained for purposes of section 201 of S. 

6 Con. Res. 21 (110th Congress). 

Passed the House of Representatives July 11, 2014. 

Attest: KAREN L. HAAS, 

Clerk. 


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Calendar No. 465 

113TH CONGRESS 

2D SESSION H. R. 4718 

AN ACT 

modify and make permanent bonus depreciation. 

To amend the Internal Revenue Code of 1986 to 

JULY 15, 2014 

Read the second time and placed on the calendar 


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