I 

113TH CONGRESS 

2D SESSION H. R. 4718 

To amend the Internal Revenue Code of 1986 to modify and make permanent 

bonus depreciation. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2014 

Mr. TIBERI (for himself, Mr. SCHOCK, Mr. YOUNG of Indiana, Mr. REED, Mr. 

PAULSEN, Mr. GRIFFIN of Arkansas, Mr. NUNES, Mr. KELLY of Pennsylvania, Mr. BRADY of Texas, Ms. JENKINS, Mr. BOUSTANY, Mr. MARCHANT, Mrs. BLACK, Mr. BUCHANAN, Mr. RENACCI, Mr. GERLACH, Mr. 

REICHERT, Mr. HUIZENGA of Michigan, and Mr. ROSKAM) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

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: 


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

2 this subsection— 

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

4 property’ means property— 

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

6 which has a recovery period of 20 years or 

7 less, 

8 ‘‘(II) which is computer software 

9 (as defined in section 167(f)(1)(B)) 

10 for which a deduction is allowable 

11 under section 167(a) without regard 

12 to this subsection, 

13 ‘‘(III) which is water utility prop14 erty, 

15 ‘‘(IV) which is qualified leasehold 

16 improvement property, or 

17 ‘‘(V) which is qualified retail im18 provement property, and 

19 ‘‘(ii) the original use of which com20 mences with the taxpayer. 

21 ‘‘(B) EXCEPTION FOR ALTERNATIVE DE22 PRECIATION PROPERTY.—The term ‘qualified 

23 property’ shall not include any property to 

24 which the alternative depreciation system under 

25 subsection (g) applies, determined— 


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

2 of subsection (g) (relating to election to 

3 have system apply), and 

4 ‘‘(ii) after application of section 

5 280F(b) (relating to listed property with 

6 limited business use). 

7 ‘‘(C) SPECIAL RULES.— 

8 ‘‘(i) SALE-LEASEBACKS.—For pur9 poses of clause (ii) and subparagraph 

10 (A)(ii), if property is— 

11 ‘‘(I) originally placed in service 

12 by a person, and 

13 ‘‘(II) sold and leased back by 

14 such person within 3 months after the 

15 date such property was originally 

16 placed in service, 

17 such property shall be treated as originally 

18 placed in service not earlier than the date 

19 on which such property is used under the 

20 leaseback referred to in subclause (II). 

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

22 subparagraph (A)(ii), if— 

23 ‘‘(I) property is originally placed 

24 in service by the lessor of such prop25 erty, 


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1 ‘‘(II) such property is sold by 

2 such lessor or any subsequent pur3 chaser within 3 months after the date 

4 such property was originally placed in 

5 service (or, in the case of multiple 

6 units of property subject to the same 

7 lease, within 3 months after the date 

8 the final unit is placed in service, so 

9 long as the period between the time 

10 the first unit is placed in service and 

11 the time the last unit is placed in 

12 service does not exceed 12 months), 

13 and 

14 ‘‘(III) the user of such property 

15 after the last sale during such 3- 

16 month period remains the same as 

17 when such property was originally 

18 placed in service, 

19 such property shall be treated as originally 

20 placed in service not earlier than the date 

21 of such last sale. 

22 ‘‘(D) COORDINATION WITH SECTION

23 280F.—For purposes of section 280F: 

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

25 passenger automobile (as defined in section 


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1 280F(d)(5)) which is qualified property, 

2 the Secretary shall increase the limitation 

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

4 ‘‘(ii) LISTED PROPERTY.—The deduc5 tion allowable under paragraph (1) shall be 

6 taken into account in computing any re7 capture amount under section 280F(b)(2). 

8 ‘‘(iii) INFLATION ADJUSTMENT.—In 

9 the case of any taxable year beginning in 

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

11 amount in clause (i) shall be increased by 

12 an amount equal to— 

13 ‘‘(I) such dollar amount, multi14 plied by 

15 ‘‘(II) the automobile price infla16 tion adjustment determined under sec17 tion 280F(d)(7)(B)(i) for the calendar 

18 year in which such taxable year begins 

19 by substituting ‘2013’ for ‘1987’ in 

20 subclause (II) thereof. 

21 If any increase under the preceding sen22 tence is not a multiple of $100, such in23 crease shall be rounded to the nearest mul24 tiple of $100. 


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1 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

2 MINIMUM TAX.—For purposes of determining 

3 alternative minimum taxable income under sec4 tion 55, the deduction under section 167 for 

5 qualified property shall be determined without 

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

7 (b) EXPANSION OF ELECTION TO ACCELERATE AMT 

8 CREDITS IN LIEU OF BONUS DEPRECIATION.—Section 

9 168(k)(4) of such Code is amended to read as follows: 

10 ‘‘(4) ELECTION TO ACCELERATE AMT CREDITS

11 IN LIEU OF BONUS DEPRECIATION.— 

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

13 to have this paragraph apply for any taxable 

14 year— 

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

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

17 year, 

18 ‘‘(ii) the applicable depreciation meth19 od used under this section with respect to 

20 any qualified property shall be the straight 

21 line method, and 

22 ‘‘(iii) the limitation imposed by section 

23 53(c) for such taxable year shall be in24 creased by the bonus depreciation amount 


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1 which is determined for such taxable year 

2 under subparagraph (B). 

3 ‘‘(B) BONUS DEPRECIATION AMOUNT.— 

4 For purposes of this paragraph— 

5 ‘‘(i) IN GENERAL.—The bonus depre6 ciation amount for any taxable year is an 

7 amount equal to 20 percent of the excess 

8 (if any) of— 

9 ‘‘(I) the aggregate amount of de10 preciation which would be allowed 

11 under this section for qualified prop12 erty placed in service by the taxpayer 

13 during such taxable year if paragraph 

14 (1) applied to all such property, over 

15 ‘‘(II) the aggregate amount of 

16 depreciation which would be allowed 

17 under this section for qualified prop18 erty placed in service by the taxpayer 

19 during such taxable year if paragraph 

20 (1) did not apply to any such prop21 erty. 

22 The aggregate amounts determined under 

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

24 without regard to any election made under 

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


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1 and without regard to subparagraph 

2 (A)(ii). 

3 ‘‘(ii) LIMITATION.—The bonus depre4 ciation amount for any taxable year shall 

5 not exceed the lesser of— 

6 ‘‘(I) 50 percent of the minimum 

7 tax credit under section 53(b) for the 

8 first taxable year ending after Decem9 ber 31, 2013, or 

10 ‘‘(II) the minimum tax credit 

11 under section 53(b) for such taxable 

12 year determined by taking into ac13 count only the adjusted minimum tax 

14 for taxable years ending before Janu15 ary 1, 2014 (determined by treating 

16 credits as allowed on a first-in, first17 out basis). 

18 ‘‘(iii) AGGREGATION RULE.—All cor19 porations which are treated as a single em20 ployer under section 52(a) shall be treat21 ed— 

22 ‘‘(I) as 1 taxpayer for purposes 

23 of this paragraph, and 


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1 ‘‘(II) as having elected the appli2 cation of this paragraph if any such 

3 corporation so elects. 

4 ‘‘(C) CREDIT REFUNDABLE.—For pur5 poses of section 6401(b), the aggregate increase 

6 in the credits allowable under part IV of sub7 chapter A for any taxable year resulting from 

8 the application of this paragraph shall be treat9 ed as allowed under subpart C of such part 

10 (and not any other subpart). 

11 ‘‘(D) OTHER RULES.— 

12 ‘‘(i) ELECTION.—Any election under 

13 this paragraph may be revoked only with 

14 the consent of the Secretary. 

15 ‘‘(ii) PARTNERSHIPS WITH ELECTING

16 PARTNERS.—In the case of a corporation 

17 which is a partner in a partnership and 

18 which makes an election under subpara19 graph (A) for the taxable year, for pur20 poses of determining such corporation’s 

21 distributive share of partnership items 

22 under section 702 for such taxable year— 

23 ‘‘(I) paragraphs (1)(A), 

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

25 apply, and 


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1 ‘‘(II) the applicable depreciation 

2 method used under this section with 

3 respect to any qualified property shall 

4 be the straight line method. 

5 ‘‘(iii) CERTAIN PARTNERSHIPS.—In 

6 the case of a partnership in which more 

7 than 50 percent of the capital and profits 

8 interests are owned (directly or indirectly) 

9 at all times during the taxable year by 1 

10 corporation (or by corporations treated as 

11 1 taxpayer under subparagraph (B)(iii)), 

12 each partner shall compute its bonus de13 preciation amount under clause (i) of sub14 paragraph (B) by taking into account its 

15 distributive share of the amounts deter16 mined by the partnership under subclauses 

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

18 year of the partnership ending with or 

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

20 (c) SPECIAL RULES FOR TREES AND VINES BEARING

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

22 amended— 

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

24 (2) by inserting after paragraph (4) the fol25 lowing new paragraph: 


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

2 BEARING FRUITS AND NUTS.— 

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

4 tree or vine bearing fruits or nuts which is 

5 planted, or is grafted to a plant that has al6 ready been planted, by the taxpayer in the ordi7 nary course of the taxpayer’s farming business 

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

9 ‘‘(i) a depreciation deduction equal to 

10 50 percent of the adjusted basis of such 

11 tree or vine shall be allowed under section 

12 167(a) for the taxable year in which such 

13 tree or vine is so planted or grafted, and 

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

15 vine shall be reduced by the amount of 

16 such deduction. 

17 ‘‘(B) ELECTION OUT.—If a taxpayer 

18 makes an election under this subparagraph for 

19 any taxable year, this paragraph shall not apply 

20 to any tree or vine planted or grafted during 

21 such taxable year. An election under this sub22 paragraph may be revoked only with the con23 sent of the Secretary. 

24 ‘‘(C) ADDITIONAL DEPRECIATION MAY BE

25 CLAIMED ONLY ONCE.—If this paragraph apVerDate Mar 15 2010 01:56 May 29, 2014 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4718.IH H4718

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1 plies to any tree or vine, such tree or vine shall 

2 not be treated as qualified property in the tax3 able year in which placed in service. 

4 ‘‘(D) COORDINATION WITH ELECTION TO

5 ACCELERATE AMT CREDITS.—If a corporation 

6 makes an election under paragraph (4) for any 

7 taxable year, the amount under paragraph 

8 (4)(B)(i)(I) for such taxable year shall be in9 creased by the amount determined under sub10 paragraph (A)(i) for such taxable year. 

11 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

12 MINIMUM TAX.—Rules similar to the rules of 

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

14 this paragraph.’’. 

15 (d) CONFORMING AMENDMENTS.— 

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

17 by striking subparagraph (D). 

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

19 adding at the end the following new paragraph: 

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

21 election under this paragraph with respect to any 

22 class of property for any taxable year, this sub23 section shall not apply to all property in such class 

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

25 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 subsection shall apply to property placed in 

25 service 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. 

Æ 


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