‘‘(A) IN
GENERAL.—In the case of any 
specified plant which is planted, or is grafted to 
a plant that has already been planted, by the 
taxpayer in the ordinary course of the tax-
payer’s farming business (as defined in section 
263A(e)(4)) during a taxable year for which the 
taxpayer has elected the application of this 
paragraph— 
‘‘(i) a depreciation deduction equal to 
50 percent of the adjusted basis of such 
specified plant shall be allowed under sec-
tion 167(a) for the taxable year in which 
such specified plant is so planted or graft-
ed, and 
‘‘(ii) the adjusted basis of such speci-
fied plant shall be reduced by the amount 
of such deduction. 
‘‘(B) SPECIFIED PLANT.—For purposes of 
this paragraph, the term ‘specified plant’ 
means— 
‘‘(i) any tree or vine which bears 
fruits or nuts, and 
‘‘(ii) any other plant which will have 
more than one yield of fruits or nuts and 
which generally has a period of more than 
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2 years from the time of planting or graft-
ing to the time at which such plant begins 
bearing fruits or nuts. 
Such term shall not include any property which 
is planted or grafted outside of the United 
States. 
‘‘(C) ELECTION
REVOCABLE
ONLY
WITH 
CONSENT.—An election under this paragraph 
may be revoked only with the consent of the 
Secretary. 
‘‘(D) ADDITIONAL DEPRECIATION MAY BE 
CLAIMED ONLY ONCE.—If this paragraph ap-
plies to any specified plant, such specified plant 
shall not be treated as qualified property in the 
taxable year in which placed in service. 
‘‘(E) DEDUCTION ALLOWED IN COMPUTING 
MINIMUM TAX.—Rules similar to the rules of 
paragraph (2)(E) shall apply for purposes of 
this paragraph.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 168(e)(6) of such Code is amend-
ed— 
(A) by redesignating subparagraphs (A) 
and (B) as subparagraphs (D) and (E), respec-
tively, 
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(B) by striking all that precedes subpara-
graph (D) (as so redesignated) and inserting 
the following: 
‘‘(6) QUALIFIED
LEASEHOLD
IMPROVEMENT 
PROPERTY.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
leasehold improvement property’ means any im-
provement to an interior portion of a building 
which is nonresidential real property if— 
‘‘(i) such improvement is made under 
or pursuant to a lease (as defined in sub-
section (h)(7))— 
‘‘(I) by the lessee (or any subles-
see) of such portion, or 
‘‘(II) by the lessor of such por-
tion, 
‘‘(ii) such portion is to be occupied ex-
clusively by the lessee (or any sublessee) of 
such portion, and 
‘‘(iii) such improvement is placed in 
service more than 3 years after the date 
the building was first placed in service. 
‘‘(B) CERTAIN
IMPROVEMENTS
NOT
IN-
CLUDED.—Such term shall not include any im-
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provement for which the expenditure is attrib-
utable to— 
‘‘(i) the enlargement of the building, 
‘‘(ii) any elevator or escalator, 
‘‘(iii) any structural component bene-
fitting a common area, or 
‘‘(iv) the internal structural frame-
work of the building. 
‘‘(C) DEFINITIONS AND SPECIAL RULES.— 
For purposes of this paragraph— 
‘‘(i) COMMITMENT TO LEASE TREAT-
ED
AS
LEASE.—A commitment to enter 
into a lease shall be treated as a lease, and 
the parties to such commitment shall be 
treated as lessor and lessee, respectively. 
‘‘(ii) RELATED PERSONS.—A lease be-
tween related persons shall not be consid-
ered a lease. For purposes of the preceding 
sentence, 
the 
term 
‘related 
persons’ 
means— 
‘‘(I) members of an affiliated 
group (as defined in section 1504), 
and 
‘‘(II) persons having a relation-
ship described in subsection (b) of 
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section 267; except that, for purposes 
of this clause, the phrase ‘80 percent 
or more’ shall be substituted for the 
phrase ‘more than 50 percent’ each 
place it appears in such subsection.’’, 
and 
(C) by striking ‘‘subparagraph (A)’’ in 
subparagraph (E) (as so redesignated) and in-
serting ‘‘subparagraph (D)’’. 
(2) Section 168(e)(7)(B) of such Code is 
amended by striking ‘‘qualified leasehold improve-
ment property’’ and inserting ‘‘qualified improve-
ment property’’. 
(3) Section 168(e)(8) of such Code is amended 
by striking subparagraph (D). 
(4) Section 168(k) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(6) ELECTION OUT.—If a taxpayer makes an 
election under this paragraph with respect to any 
class of property for any taxable year, paragraphs 
(1) and (2)(D) shall not apply to any qualified prop-
erty in such class placed in service during such tax-
able year. An election under this paragraph may be 
revoked only with the consent of the Secretary.’’. 
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(5) Section 168(l)(3) of such Code is amend-
ed— 
(A) by striking ‘‘section 168(k)’’ in sub-
paragraph (A) and inserting ‘‘subsection (k)’’, 
and 
(B) by striking ‘‘section 168(k)(2)(D)(i)’’ 
in subparagraph (B) and inserting ‘‘subsection 
(k)(2)(B)’’. 
(6) Section 168(l)(4) of such Code is amended 
by striking ‘‘subparagraph (E) of section 168(k)(2)’’ 
and all that follows and inserting ‘‘subsection 
(k)(2)(C) shall apply.’’. 
(7) Section 168(l)(5) of such Code is amended 
by striking ‘‘section 168(k)(2)(G)’’ and inserting 
‘‘subsection (k)(2)(E)’’. 
(8) Section 263A(c) of such Code is amended 
by adding at the end the following new paragraph: 
‘‘(7) 
COORDINATION
WITH
SECTION 
168(k)(5).—This section shall not apply to any 
amount allowed as a deduction by reason of section 
168(k)(5) (relating to special rules for certain plants 
bearing fruits and nuts).’’. 
(9) Section 460(c)(6)(B) of such Code is 
amended by striking ‘‘which—’’ and all that follows 
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