179 Act

To amend the Internal Revenue Code of 1986 to make permanent the expensing limitations and treatment of certain real property as section 179 property, and for other purposes. 1. Short title This Act may be cited as the 179 Act 2. Extension of increased expensing limitations and treatment of certain real property as section 179 property (a) In general (1) Dollar limitation Section 179(b)(1) (1) Dollar limitation The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $500,000. . (2) Reduction in limitation Section 179(b)(2) of such Code is amended to read as follows: (2) Reduction in limitation The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds $2,000,000. . (b) Computer software Section 179(d)(1)(A)(ii) of such Code is amended by striking and before 2015 (c) Election Section 179(c)(2) of such Code is amended by striking and before 2015 (d) Special rules for treatment of qualified real property (1) In general Section 179(f)(1) of such Code is amended by striking and before 2015 (2) Carryover limitation Section 179(f)(4) of such Code is amended to read as follows: (4) Carryover limitation For purposes of applying this paragraph and subsection (b)(3)(B) to any taxable year, the amount which is disallowed under subsection (b)(3)(A) for such taxable year which is attributed to qualified real property shall be the amount which bears the same ratio to the total amount so disallowed as— (A) the aggregate amount attributable to qualified real property placed in service during such taxable year, increased by the portion of any amount carried over to such taxable year from a prior taxable year which is attributable to such property, bears to (B) the total amount of section 179 property placed in service during such taxable year, increased by the aggregate amount carried over to such taxable year from any prior taxable year. For purposes of the preceding sentence, only section 179 property with respect to which an election was made under subsection (c)(1) shall be taken into account. . (e) Time when property treated as placed in service for 2016 Section 179(d) of such Code is amended by adding at the end the following: (11) Time when property treated as placed in service For purposes of this section, section 179 property placed in service during the first quarter of the first taxable year beginning in 2016 by a taxpayer shall be treated as having placed such property in service on the last day of the preceding taxable year if the taxpayer elects such treatment with respect to such preceding taxable year in accordance with subsection (c). . (f) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014.

Summary: 179 Act This bill amends the Internal Revenue Code, with respect to the taxpayer election to expense depreciable business property (179 property), to make permanent: (1) the increased $500,000 limitation on the amount of such property eligible for expensing; (2) a $2 million threshold for depreciable property, after which the amount of the expensing allowance is reduced; (3) the expensing of computer software; and (4) the revocability of the expensing election. The bill also makes permanent the expensing allowance for qualified real property, which includes qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.The bill allows a carryover of disallowed amounts of qualified real property to taxable years beginning after 2014.