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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE 
PERMANENT. 
(a) MADE PERMANENT; INCLUSION OF QUALIFIED 
RETAIL IMPROVEMENT PROPERTY.—Section 168(k)(2) of 
the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(2) QUALIFIED PROPERTY.—For purposes of 
this subsection— 
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‘‘(A) IN
GENERAL.—The term ‘qualified 
property’ means property— 
‘‘(i)(I) to which this section applies 
which has a recovery period of 20 years or 
less, 
‘‘(II) which is computer software (as 
defined in section 167(f)(1)(B)) for which 
a deduction is allowable under section 
167(a) without regard to this subsection, 
‘‘(III) which is water utility property, 
‘‘(IV) which is qualified leasehold im-
provement property, or 
‘‘(V) which is qualified retail improve-
ment property, and 
‘‘(ii) the original use of which com-
mences with the taxpayer. 
‘‘(B) EXCEPTION FOR ALTERNATIVE DE-
PRECIATION
PROPERTY.—The term ‘qualified 
property’ shall not include any property to 
which the alternative depreciation system under 
subsection (g) applies, determined— 
‘‘(i) without regard to paragraph (7) 
of subsection (g) (relating to election to 
have system apply), and 
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‘‘(ii) after application of section 
280F(b) (relating to listed property with 
limited business use). 
‘‘(C) SPECIAL RULES.— 
‘‘(i) 
SALE-LEASEBACKS.—For 
pur-
poses of clause (ii) and subparagraph 
(A)(ii), if property is— 
‘‘(I) originally placed in service 
by a person, and 
‘‘(II) sold and leased back by 
such person within 3 months after the 
date such property was originally 
placed in service, 
such property shall be treated as originally 
placed in service not earlier than the date 
on which such property is used under the 
leaseback referred to in subclause (II). 
‘‘(ii) SYNDICATION.—For purposes of 
subparagraph (A)(ii), if— 
‘‘(I) property is originally placed 
in service by the lessor of such prop-
erty, 
‘‘(II) such property is sold by 
such lessor or any subsequent pur-
chaser within 3 months after the date 
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such property was originally placed in 
service (or, in the case of multiple 
units of property subject to the same 
lease, within 3 months after the date 
the final unit is placed in service, so 
long as the period between the time 
the first unit is placed in service and 
the time the last unit is placed in 
service does not exceed 12 months), 
and 
‘‘(III) the user of such property 
after the last sale during such 3- 
month period remains the same as 
when such property was originally 
placed in service, 
such property shall be treated as originally 
placed in service not earlier than the date 
of such last sale. 
‘‘(D) 
COORDINATION
WITH
SECTION 
280F.—For purposes of section 280F— 
‘‘(i) AUTOMOBILES.—In the case of a 
passenger automobile (as defined in section 
280F(d)(5)) which is qualified property, 
the Secretary shall increase the limitation 
under section 280F(a)(1)(A)(i) by $8,000. 
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‘‘(ii) LISTED PROPERTY.—The deduc-
tion allowable under paragraph (1) shall be 
taken into account in computing any re-
capture amount under section 280F(b)(2). 
‘‘(iii) INFLATION
ADJUSTMENT.—In 
the case of any taxable year beginning in 
a calendar year after 2014, the $8,000 
amount in clause (i) shall be increased by 
an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the automobile price infla-
tion adjustment determined under sec-
tion 280F(d)(7)(B)(i) for the calendar 
year in which such taxable year begins 
by substituting ‘2013’ for ‘1987’ in 
subclause (II) thereof. 
If any increase under the preceding sen-
tence is not a multiple of $100, such in-
crease shall be rounded to the nearest mul-
tiple of $100. 
‘‘(E) DEDUCTION ALLOWED IN COMPUTING 
MINIMUM
TAX.—For purposes of determining 
alternative minimum taxable income under sec-
tion 55, the deduction under section 167 for 
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qualified property shall be determined without 
regard to any adjustment under section 56.’’. 
(b) EXPANSION OF ELECTION TO ACCELERATE AMT 
CREDITS IN LIEU OF BONUS DEPRECIATION.—Section 
168(k)(4) of such Code is amended to read as follows: 
‘‘(4) ELECTION TO ACCELERATE AMT CREDITS 
IN LIEU OF BONUS DEPRECIATION.— 
‘‘(A) IN GENERAL.—If a corporation elects 
to have this paragraph apply for any taxable 
year— 
‘‘(i) paragraphs (1)(A), (2)(D)(i), and 
(5)(A)(i) shall not apply for such taxable 
year, 
‘‘(ii) the applicable depreciation meth-
od used under this section with respect to 
any qualified property shall be the straight 
line method, and 
‘‘(iii) the limitation imposed by section 
53(c) for such taxable year shall be in-
creased by the bonus depreciation amount 
which is determined for such taxable year 
under subparagraph (B). 
‘‘(B) BONUS
DEPRECIATION
AMOUNT.— 
For purposes of this paragraph— 
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‘‘(i) IN GENERAL.—The bonus depre-
ciation amount for any taxable year is an 
amount equal to 20 percent of the excess 
(if any) of— 
‘‘(I) the aggregate amount of de-
preciation which would be allowed 
under this section for qualified prop-
erty placed in service by the taxpayer 
during such taxable year if paragraph 
(1) applied to all such property, over 
‘‘(II) the aggregate amount of 
depreciation which would be allowed 
under this section for qualified prop-
erty placed in service by the taxpayer 
during such taxable year if paragraph 
(1) did not apply to any such prop-
erty. 
The aggregate amounts determined under 
subclauses (I) and (II) shall be determined 
without regard to any election made under 
subsection (b)(2)(D), (b)(3)(D), or (g)(7) 
and 
without 
regard 
to 
subparagraph 
(A)(ii). 
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‘‘(ii) LIMITATION.—The bonus depre-
ciation amount for any taxable year shall 
not exceed the lesser of— 
‘‘(I) 50 percent of the minimum 
tax credit under section 53(b) for the 
first taxable year ending after Decem-
ber 31, 2013, or 
‘‘(II) the minimum tax credit 
under section 53(b) for such taxable 
year determined by taking into ac-
count only the adjusted net minimum 
tax for taxable years ending before 
January 1, 2014 (determined by 
treating credits as allowed on a first- 
in, first-out basis). 
‘‘(iii) AGGREGATION RULE.—All cor-
porations which are treated as a single em-
ployer under section 52(a) shall be treat-
ed— 
‘‘(I) as 1 taxpayer for purposes 
of this paragraph, and 
‘‘(II) as having elected the appli-
cation of this paragraph if any such 
corporation so elects. 
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‘‘(C) CREDIT
REFUNDABLE.—For pur-
poses of section 6401(b), the aggregate increase 
in the credits allowable under part IV of sub-
chapter A for any taxable year resulting from 
the application of this paragraph shall be treat-
ed as allowed under subpart C of such part 
(and not any other subpart). 
‘‘(D) OTHER RULES.— 
‘‘(i) ELECTION.—Any election under 
this paragraph may be revoked only with 
the consent of the Secretary. 
‘‘(ii) PARTNERSHIPS WITH ELECTING 
PARTNERS.—In the case of a corporation 
which is a partner in a partnership and 
which makes an election under subpara-
graph (A) for the taxable year, for pur-
poses of determining such corporation’s 
distributive share of partnership items 
under section 702 for such taxable year— 
‘‘(I) 
paragraphs 
(1)(A), 
(2)(D)(i), and (5)(A)(i) shall not 
apply, and 
‘‘(II) the applicable depreciation 
method used under this section with 
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respect to any qualified property shall 
be the straight line method. 
‘‘(iii) CERTAIN
PARTNERSHIPS.—In 
the case of a partnership in which more 
than 50 percent of the capital and profits 
interests are owned (directly or indirectly) 
at all times during the taxable year by 1 
corporation (or by corporations treated as 
1 taxpayer under subparagraph (B)(iii)), 
each partner shall compute its bonus de-
preciation amount under clause (i) of sub-
paragraph (B) by taking into account its 
distributive share of the amounts deter-
mined by the partnership under subclauses 
(I) and (II) of such clause for the taxable 
year of the partnership ending with or 
within the taxable year of the partner.’’. 
(c) SPECIAL RULES FOR TREES AND VINES BEARING 
FRUITS
AND NUTS.—Section 168(k) of such Code is 
amended— 
(1) by striking paragraph (5), and 
(2) by inserting after paragraph (4) the fol-
lowing new paragraph: 
‘‘(5) SPECIAL RULES FOR TREES AND VINES 
BEARING FRUITS AND NUTS.— 
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‘‘(A) IN
GENERAL.—In the case of any 
tree or vine bearing fruits or nuts which is 
planted, or is grafted to a plant that has al-
ready been planted, by the taxpayer in the ordi-
nary course of the taxpayer’s farming business 
(as defined in section 263A(e)(4))— 
‘‘(i) a depreciation deduction equal to 
50 percent of the adjusted basis of such 
tree or vine shall be allowed under section 
167(a) for the taxable year in which such 
tree or vine is so planted or grafted, and 
‘‘(ii) the adjusted basis of such tree or 
vine shall be reduced by the amount of 
such deduction. 
‘‘(B) ELECTION
OUT.—If a taxpayer 
makes an election under this subparagraph for 
any taxable year, this paragraph shall not apply 
to any tree or vine planted or grafted during 
such taxable year. An election under this sub-
paragraph may be revoked only with the con-
sent of the Secretary. 
‘‘(C) ADDITIONAL DEPRECIATION MAY BE 
CLAIMED ONLY ONCE.—If this paragraph ap-
plies to any tree or vine, such tree or vine shall 
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not be treated as qualified property in the tax-
able year in which placed in service. 
‘‘(D) COORDINATION WITH ELECTION TO 
ACCELERATE AMT CREDITS.—If a corporation 
makes an election under paragraph (4) for any 
taxable year, the amount under paragraph 
(4)(B)(i)(I) for such taxable year shall be in-
creased by the amount determined under sub-
paragraph (A)(i) for such taxable year. 
‘‘(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)(8) of such Code is amended 
by striking subparagraph (D). 
(2) 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, this sub-
section shall not apply to all property in such class 
placed in service (or, in the case of paragraph (5), 
planted or grafted) during such taxable year. An 
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election under this paragraph may be revoked only 
with the consent of the Secretary.’’. 
(3) Section 168(l)(5) of such Code is amended 
by striking ‘‘section 168(k)(2)(G)’’ and inserting 
‘‘section 168(k)(2)(E)’’. 
(4) 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 allowable as a deduction by reason of section 
168(k)(5) (relating to special rules for trees and 
vines bearing fruits and nuts).’’. 
(5) Section 460(c)(6)(B) of such Code is 
amended by striking ‘‘which—’’ and all that follows 
and inserting ‘‘which has a recovery period of 7 
years or less.’’. 
(6) Section 168(k) of such Code is amended by 
striking ‘‘ACQUIRED AFTER DECEMBER 31, 2007, 
AND BEFORE JANUARY 1, 2014’’ in the heading 
thereof. 
(e) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to property placed in service 
after December 31, 2013. 
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(2) EXPANSION OF ELECTION TO ACCELERATE 
AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 
(A) IN GENERAL.—The amendment made 
by subsection (b) (other than so much of such 
amendment 
as 
relates 
to 
section 
168(k)(4)(D)(iii) of such Code, as added by 
such amendment) shall apply to taxable years 
ending after December 31, 2013. 
(B) TRANSITIONAL RULE.—In the case of 
a taxable year beginning before January 1, 
2014, and ending after December 31, 2013, the 
bonus depreciation amount determined under 
section 168(k)(4) of such Code for such year 
shall be the sum of— 
(i) such amount determined without 
regard to the amendments made by this 
section and— 
(I) by taking into account only 
property placed in service before Jan-
uary 1, 2014, and 
(II) by multiplying the limitation 
under section 168(k)(4)(C)(ii) of such 
Code (determined without regard to 
the amendments made by this section) 
by a fraction the numerator of which 
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is the number of days in the taxable 
year before January 1, 2014, and the 
denominator of which is the number 
of days in the taxable year, and 
(ii) such amount determined after 
taking into account the amendments made 
by this section and— 
(I) by taking into account only 
property placed in service after De-
cember 31, 2013, and 
(II) by multiplying the limitation 
under section 168(k)(4)(B)(ii) of such 
Code (as amended by this section) by 
a fraction the numerator of which is 
the number of days in the taxable 
year after December 31, 2013, and 
the denominator of which is the num-
ber of days in the taxable year. 
(3) SPECIAL RULES FOR CERTAIN TREES AND 
VINES.—The amendment made by subsection (c)(2) 
shall apply to trees and vines planted or grafted 
after December 31, 2013. 
SEC. 2. BUDGETARY EFFECTS. 
(a) STATUTORY PAY-AS-YOU-GO SCORECARDS.—The 
budgetary effects of this Act shall not be entered on either 
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PAYGO scorecard maintained pursuant to section 4(d) of 
the Statutory Pay-As-You-Go Act of 2010. 
(b) SENATE PAYGO SCORECARDS.—The budgetary 
effects of this Act shall not be entered on any PAYGO 
scorecard maintained for purposes of section 201 of S. 
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 
To amend the Internal Revenue Code of 1986 to 
modify and make permanent bonus depreciation. 
JULY 15, 2014 
Read the second time and placed on the calendar 
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