‘‘(i) housing credit dollar amounts al-
located during the period beginning on 
January 1, 2006, and ending on December 
31, 2008, and 
‘‘(ii) buildings placed in service during 
such period to the extent that paragraph 
(1) of section 42(h) does not apply to any 
building by reason of paragraph (4) there-
of, but only with respect to bonds issued 
after December 31, 2005. 
‘‘(3) SPECIAL
RULE
FOR
APPLYING
INCOME 
TESTS.—In the case of property placed in service— 
‘‘(A) during 2006, 2007, or 2008, 
‘‘(B) in the Gulf Opportunity Zone, and 
‘‘(C) in a nonmetropolitan area (as defined 
in section 42(d)(5)(C)(iv)(IV)), 
section 42 shall be applied by substituting ‘national 
nonmetropolitan median gross income (determined 
under rules similar to the rules of section 
142(d)(2)(B))’ for ‘area median gross income’ in 
subparagraphs (A) and (B) of section 42(g)(1). 
‘‘(4) DEFINITIONS.—Any term used in this sub-
section which is also used in section 42 shall have 
the same meaning as when used in such section.
‘‘(d) SPECIAL ALLOWANCE FOR CERTAIN PROPERTY 
ACQUIRED ON OR AFTER AUGUST 28, 2005.— 
‘‘(1) ADDITIONAL ALLOWANCE.—In the case of 
any qualified Gulf Opportunity Zone property— 
‘‘(A) the depreciation deduction provided 
by section 167(a) for the taxable year in which 
such property is placed in service shall include 
an allowance equal to 50 percent of the ad-
justed basis of such property, and 
‘‘(B) the adjusted basis of the qualified 
Gulf Opportunity Zone property shall be re-
duced by the amount of such deduction before 
computing the amount otherwise allowable as a 
depreciation deduction under this chapter for 
such taxable year and any subsequent taxable 
year. 
‘‘(2) QUALIFIED
GULF
OPPORTUNITY
ZONE 
PROPERTY.— For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
Gulf Opportunity Zone property’ means prop-
erty— 
‘‘(i)(I) which is described in section 
168(k)(2)(A)(i), or 
‘‘(II) which is nonresidential real 
property or residential rental property,
‘‘(ii) substantially all of the use of 
which is in the Gulf Opportunity Zone and 
is in the active conduct of a trade or busi-
ness by the taxpayer in such Zone, 
‘‘(iii) the original use of which in the 
Gulf Opportunity Zone commences with 
the taxpayer on or after August 28, 2005, 
‘‘(iv) which is acquired by the tax-
payer by purchase (as defined in section 
179(d)) on or after August 28, 2005, but 
only if no written binding contract for the 
acquisition was in effect before August 28, 
2005, and 
‘‘(v) which is placed in service by the 
taxpayer on or before December 31, 2007 
(December 31, 2008, in the case of non-
residential real property and residential 
rental property). 
‘‘(B) EXCEPTIONS.— 
‘‘(i) 
ALTERNATIVE
DEPRECIATION 
PROPERTY.—Such term shall not include 
any 
property 
described 
in 
section 
168(k)(2)(D)(i). 
‘‘(ii) TAX-EXEMPT
BOND-FINANCED 
PROPERTY.—Such term shall not include
any property any portion of which is fi-
nanced with the proceeds of any obligation 
the interest on which is exempt from tax 
under section 103. 
‘‘(iii) 
QUALIFIED
REVITALIZATION 
BUILDINGS.—Such term shall not include 
any qualified revitalization building with 
respect to which the taxpayer has elected 
the application of paragraph (1) or (2) of 
section 1400I(a). 
‘‘(iv) ELECTION OUT.—If a taxpayer 
makes an election under this clause with 
respect to any class of property for any 
taxable year, this subsection shall not 
apply to all property in such class placed 
in service during such taxable year. 
‘‘(3) SPECIAL
RULES.—For purposes of this 
subsection, rules similar to the rules of subpara-
graph (E) of section 168(k)(2) shall apply, except 
that such subparagraph shall be applied— 
‘‘(A) by substituting ‘August 27, 2005’ for 
‘September 10, 2001’ each place it appears 
therein, 
‘‘(B) by substituting ‘January 1, 2008’ for 
‘January 1, 2005’ in clause (i) thereof, and