Source: https://www.law.cornell.edu/uscode/text/26/280F?quicktabs_8=1
Timestamp: 2015-11-30 11:40:48
Document Index: 383905414

Matched Legal Cases: ['§ 179', '§ 4', '§ 201', '§ 1812', '§ 1002', '§ 7643', '§ 11813', '§ 1702', '§ 971', '§ 6009', '§ 602', '§ 2043', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 11813', '§ 1018', '§ 1002', '§ 1002', '§ 201', '§ 201', '§ 201', '§ 201', '§ 201', '§ 201', '§ 201', '§ 201', '§ 1812', '§ 201', '§ 1812', '§ 201', '§ 1812', '§ 1812', '§ 1812', '§ 201', '§ 201', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 2043', '§ 971', '§ 602', '§ 7643', '§ 6', '§ 179']

Limitation on amount of depreciation for luxury automobiles (1)
Limitation The amount of the depreciation deduction for any taxable year for any passenger automobile shall not exceed—
(i)$2,560 for the 1st taxable year in the recovery period,
(ii)$4,100 for the 2nd taxable year in the recovery period,
(iii)$2,450 for the 3rd taxable year in the recovery period, and
(iv)$1,475 for each succeeding taxable year in the recovery period.
Disallowed deductions allowed for years after recovery period (i)In general
(ii)$1,475 limitation
(iii)Property must be depreciable
(iv)Amount treated as depreciation deduction
Special rule for certain clean-fuel passenger automobiles (i)Modified automobiles
(ii)Purpose built passenger vehicles
(iii)Application of subparagraph
Coordination with reductions in amount allowable by reason of personal use, etc. This subsection shall be applied before—
(A)the application of subsection (b), and
(B)the application of any other reduction in the amount of any depreciation deduction allowable under section 168 by reason of any use not qualifying the property for such credit or depreciation deduction.
Limitation where business use of listed property not greater than 50 percent (1)
Depreciation If any listed property is not predominantly used in a qualified business use for any taxable year, the deduction allowed under section 168 with respect to such property for such taxable year and any subsequent taxable year shall be determined under section 168(g) (relating to alternative depreciation system).
Recapture (A)
Where business use percentage does not exceed 50 percent If—
(i)property is predominantly used in a qualified business use in a taxable year in which it is placed in service, and
(ii)such property is not predominantly used in a qualified business use for any subsequent taxable year,
Excess depreciation For purposes of subparagraph (A), the term “excess depreciation” means the excess (if any) of—
(i)the amount of the depreciation deductions allowable with respect to the property for taxable years before the 1st taxable year in which the property was not predominantly used in a qualified business use, over
(ii)the amount which would have been so allowable if the property had not been predominantly used in a qualified business use for the taxable year in which it was placed in service.
Property predominantly used in qualified business use For purposes of this subsection, property shall be treated as predominantly used in a qualified business use for any taxable year if the business use percentage for such taxable year exceeds 50 percent.
Treatment of leases (1)
Lessor’s deductions not affected This section shall not apply to any listed property leased or held for leasing by any person regularly engaged in the business of leasing such property.
Lessee’s deductions reduced For purposes of determining the amount allowable as a deduction under this chapter for rentals or other payments under a lease for a period of 30 days or more of listed property, only the allowable percentage of such payments shall be taken into account.
Allowable percentage For purposes of paragraph (2), the allowable percentage shall be determined under tables prescribed by the Secretary. Such tables shall be prescribed so that the reduction in the deduction under paragraph (2) is substantially equivalent to the applicable restrictions contained in subsections (a) and (b).
Lease term In determining the term of any lease for purposes of paragraph (2), the rules of section 168(i)(3)(A) shall apply.
Lessee recapture Under regulations prescribed by the Secretary, rules similar to the rules of subsection (b)(3) shall apply to any lessee to which paragraph (2) applies.
Coordination with section 179 Any deduction allowable under section 179 with respect to any listed property shall be subject to the limitations of subsections (a) and (b), and the limitation of paragraph (3) of this subsection, in the same manner as if it were a depreciation deduction allowable under section 168.
Subsequent depreciation deductions reduced for deductions allocable to personal use Solely for purposes of determining the amount of the depreciation deduction for subsequent taxable years, if less than 100 percent of the use of any listed property during any taxable year is use in a trade or business (including the holding for the production of income), all of the use of such property during such taxable year shall be treated as use so described.
Deductions of employee (A)
In general Any employee use of listed property shall not be treated as use in a trade or business for purposes of determining the amount of any depreciation deduction allowable to the employee (or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property) unless such use is for the convenience of the employer and required as a condition of employment.
Employee use For purposes of subparagraph (A), the term “employee use” means any use in connection with the performance of services as an employee.
Listed property (A)
In general Except as provided in subparagraph (B), the term “listed property” means—
(i)any passenger automobile,
(ii)any other property used as a means of transportation,
(iii)any property of a type generally used for purposes of entertainment, recreation, or amusement,
(iv)any computer or peripheral equipment (as defined in section 168(i)(2)(B)), “and” [1]
(v)any other property of a type specified by the Secretary by regulations.
Exception for certain computers The term “listed property” shall not include any computer or peripheral equipment (as so defined) used exclusively at a regular business establishment and owned or leased by the person operating such establishment. For purposes of the preceding sentence, any portion of a dwelling unit shall be treated as a regular business establishment if (and only if) the requirements of section 280A(c)(1) are met with respect to such portion.
Exception for property used in business of transporting persons or property Except to the extent provided in regulations, clause (ii) of subparagraph (A) shall not apply to any property substantially all of the use of which is in a trade or business of providing to unrelated persons services consisting of the transportation of persons or property for compensation or hire.
Passenger automobile (A)
In general Except as provided in subparagraph (B), the term “passenger automobile” means any 4-wheeled vehicle—
(i)which is manufactured primarily for use on public streets, roads, and highways, and
(ii)which is rated at 6,000 pounds unloaded gross vehicle weight or less.
Exception for certain vehicles The term “passenger automobile” shall not include—
(i)any ambulance, hearse, or combination ambulance-hearse used by the taxpayer directly in a trade or business,
(ii)any vehicle used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire, and
(iii)under regulations, any truck or van.
Business use percentage (A)
In general The term “business use percentage” means the percentage of the use of any listed property during any taxable year which is a qualified business use.
Qualified business use Except as provided in subparagraph (C), the term “qualified business use” means any use in a trade or business of the taxpayer.
Exception for certain use by 5-percent owners and related persons (i)In general
(I)leasing property to any 5-percent owner or related person,
(II)use of property provided as compensation for the performance of services by a 5-percent owner or related person, or
(III)use of property provided as compensation for the performance of services by any person not described in subclause (II) unless an amount is included in the gross income of such person with respect to such use, and, where required, there was withholding under chapter 24.
(ii)Special rule for aircraft
(i)5-percent owner
(ii)Related person
Automobile price inflation adjustment (A)
In general In the case of any passenger automobile placed in service after 1988, subsection (a) shall be applied by increasing each dollar amount contained in such subsection by the automobile price inflation adjustment for the calendar year in which such automobile is placed in service. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or if the increase is a multiple of $50, such increase shall be increased to the next higher multiple of $100).
Automobile price inflation adjustment For purposes of this paragraph—
(I)the CPI automobile component for October of the preceding calendar year, exceeds
(II)the CPI automobile component for October of 1987.
(ii)CPI automobile component
Unrecovered basis For purposes of subsection (a)(2), the term “unrecovered basis” means the adjusted basis of the passenger automobile determined after the application of subsection (a) and as if all use during the recovery period were use in a trade or business (including the holding of property for the production of income).
All taxpayers holding interests in passenger automobile treated as 1 taxpayer All taxpayers holding interests in any passenger automobile shall be treated as 1 taxpayer for purposes of applying subsection (a) to such automobile, and the limitations of subsection (a) shall be allocated among such taxpayers in proportion to their interests in such automobile.
Special rule for property acquired in nonrecognition transactions For purposes of subsection (a)(2) any property acquired in a nonrecognition transaction shall be treated as a single property originally placed in service in the taxable year in which it was placed in service after being so acquired.
Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations with respect to items properly included in, or excluded from, the adjusted basis of any listed property.
[1] So in original. The quotation marks probably should not appear.
(Added Pub. L. 98–369, div. A, title I, § 179(a),July 18, 1984, 98 Stat. 713; amended Pub. L. 99–44, § 4,May 24, 1985, 99 Stat. 78; Pub. L. 99–514, title II, § 201(d)(4), title XVIII, § 1812(e)(1)(A), (C), (2)–(5), Oct. 22, 1986, 100 Stat. 2139, 2836, 2837; Pub. L. 100–647, title I, §§ 1002(a)(10), (b)(2), 1018
(u)(3),Nov. 10, 1988, 102 Stat. 3354, 3357, 3590; Pub. L. 101–239, title VII, § 7643(a),Dec. 19, 1989, 103 Stat. 2381; Pub. L. 101–508, title XI, § 11813(b)(13)(A)–(E), Nov. 5, 1990, 104 Stat. 1388–554, 1388–555; Pub. L. 104–188, title I, § 1702(h)(5),Aug. 20, 1996, 110 Stat. 1874; Pub. L. 105–34, title IX, § 971(a),Aug. 5, 1997, 111 Stat. 897; Pub. L. 105–206, title VI, § 6009(c),July 22, 1998, 112 Stat. 812; Pub. L. 107–147, title VI, § 602(b)(1),Mar. 9, 2002, 116 Stat. 59; Pub. L. 111–240, title II, § 2043(a),Sept. 27, 2010, 124 Stat. 2560.)
2010—Subsec. (d)(4)(A). Pub. L. 111–240inserted “ ‘and’ ” at end of clause (iv), redesignated clause (vi) as (v), and struck out former cl. (v) which read as follows: “any cellular telephone (or other similar telecommunications equipment), and”.
2002—Subsec. (a)(1)(C)(iii). Pub. L. 107–147added cl. (iii).
1998—Subsec. (a)(1)(C)(ii). Pub. L. 105–206substituted “subparagraphs (A) and (B)” for “subparagraph (A)”.
1997—Subsec. (a)(1)(C). Pub. L. 105–34added subpar. (C).
1996—Subsec. (a). Pub. L. 104–188struck out “investment tax credit and” after “amount of” in heading.
1990—Pub. L. 101–508, § 11813(b)(13)(E), struck out “investment tax credit and” after “Limitation on” in section catchline.
Subsec. (a)(1). Pub. L. 101–508, § 11813(b)(13)(A)(i), redesignated par. (2) as (1) and struck out former par. (1) “Investment tax credit” which read as follows: “The amount of the credit determined under section 46
(a) for any passenger automobile shall not exceed $675.”
Subsec. (a)(2). Pub. L. 101–508, § 11813(b)(13)(A)(i), redesignated par. (3) as (2). Former par. (2) redesignated (1).
Subsec. (a)(2)(B). Pub. L. 101–508, § 11813(b)(13)(A)(ii), struck out “the credit determined under section 46
(a) or” after “the amount of”.
Subsec. (a)(3). Pub. L. 101–508, § 11813(b)(13)(A)(i), redesignated par. (3) as (2).
Subsec. (a)(4). Pub. L. 101–508, § 11813(b)(13)(A)(i), struck out par. (4) “Special rule where election of reduced credit in lieu of the basis adjustment” which read as follows: “In the case of any election under section 48
(q)(4) with respect to any passenger automobile, the limitation of paragraph (1) applicable to such passenger automobile shall be 2/3 of the amount which would be so applicable but for this paragraph.”
Subsec. (b). Pub. L. 101–508, § 11813(b)(13)(B), redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) “Investment tax credit” which read as follows: “For purposes of this subtitle, any listed property shall not be treated as section 38 property for any taxable year unless such property is predominantly used in a qualified business use for such taxable year.”
Subsec. (c)(1). Pub. L. 101–508, § 11813(b)(13)(C), struck out “credits and” after “Lessor’s” in heading.
Subsec. (d)(3)(A). Pub. L. 101–508, § 11813(b)(13)(D), struck out “the amount of any credit allowable under section 38 to the employee or” after “of determining”.
1989—Subsec. (d)(4)(A)(v), (vi). Pub. L. 101–239added cl. (v) and redesignated former cl. (v) as (vi).
1988—Subsec. (b)(3)(B)(i). Pub. L. 100–647, § 1018(u)(3), substituted “depreciation deductions” for “recovery deductions”.
Subsec. (d)(1). Pub. L. 100–647, § 1002(b)(2), substituted “subsections (a) and (b), and the limitation of paragraph (3) of this subsection,” for “subsections (a) and (b)”.
Subsec. (d)(3)(A). Pub. L. 100–647, § 1002(a)(10), substituted “depreciation deduction” for “recovery deduction”.
1986—Subsec. (a)(2)(A). Pub. L. 99–514, § 201(d)(4)(A)(i), (K), substituted “depreciation deduction” for “recovery deduction” in introductory provisions and substituted cls. (i) to (iv) for former cls. (i) and (ii) which read as follows:
Subsec. (a)(2)(B). Pub. L. 99–514, § 201(d)(4)(A)(ii), (K), substituted “$1,475” for “$4,800” in heading and text of cl. (ii), and “depreciation deduction” for “recovery deduction” in heading and text of cl. (iv).
Subsec. (a)(3)(B). Pub. L. 99–514, § 201(d)(4)(K), substituted “depreciation deduction” for “recovery deduction” in two places.
Subsec. (b)(2). Pub. L. 99–514, § 201(d)(4)(J), substituted “section 168
(g) (relating to alternative depreciation system)” for “the straight line method over the earnings and profits life for such property”.
Subsec. (b)(3)(A). Pub. L. 99–514, § 201(d)(4)(B), (K), substituted “depreciation deduction” for “recovery deduction” and “section 168
(g) (relating to alternative depreciation system)” for “the straight line method over the earnings and profits life” in closing provisions.
Subsec. (b)(4). Pub. L. 99–514, § 201(d)(4)(C), in amending par. (4) generally, struck out heading “Definitions”, redesignated as par. (4) former subpar. (A) heading and text, substituted “For purposes of this section, property” for “Property”, and struck out former subpar. (B) definition of straight line method over earnings and profits life.
Subsec. (c)(4). Pub. L. 99–514, § 201(d)(4)(D), substituted “section 168
(i)(3)(A)” for “section 168
(j)(6)(B)”.
Subsec. (d)(1). Pub. L. 99–514, § 201(d)(4)(E), substituted “depreciation deduction” for “recovery deduction”.
Subsec. (d)(2). Pub. L. 99–514, § 1812(e)(5), substituted “is use described in” for “is not use described in”.
Pub. L. 99–514, § 201(d)(4)(F), substituted “depreciation deduction” for “recovery deduction” and “use in a trade or business (including the holding for the production of income)” for “use described in section 168
(c)(1) (defining recovery property)”.
Subsec. (d)(3)(A). Pub. L. 99–514, § 1812(e)(2), inserted “(or the amount of any deduction allowable to the employee for rentals or other payments under a lease of listed property)”.
Subsec. (d)(4)(A)(iv). Pub. L. 99–514, § 201(d)(4)(G), substituted “section 168
(i)(2)(B)” for “section 168
(j)(5)(D)”.
Subsec. (d)(4)(B). Pub. L. 99–514, § 1812(e)(3), inserted “and owned or leased by the person operating such establishment”.
Subsec. (d)(4)(C). Pub. L. 99–514, § 1812(e)(4), added subpar. (C).
Subsec. (d)(5)(A). Pub. L. 99–514, § 1812(e)(1)(A), (C), substituted “unloaded gross vehicle weight” for “gross vehicle weight” in cl. (ii) and inserted at end “In the case of a truck or van, clause (ii) shall be applied by substituting ‘gross vehicle weight’ for ‘unloaded gross vehicle weight’.”
Subsec. (d)(8). Pub. L. 99–514, § 201(d)(4)(H), amended par. (8) generally. Prior to amendment, par. (8) read as follows: “For purposes of subsection (a)(2), the term “unrecovered basis” means the excess (if any) of—
“(B) the amount of the recovery deductions which would have been allowable for taxable years in the recovery period determined after the application of subsection (a) and as if all use during the recovery period were use described in section 168
(c)(1).”
Subsec. (d)(10). Pub. L. 99–514, § 201(d)(4)(I), struck out “, notwithstanding any regulations prescribed under section 168
(f)(7),” after “For purposes of subsection (a)(2)”.
1985—Subsec. (a)(1). Pub. L. 99–44, § 4(a)(1), substituted “$675” for “$1,000”.
Subsec. (a)(2)(A)(i). Pub. L. 99–44, § 4(a)(2)(A), substituted “$3,200” for “$4,000”.
Subsec. (a)(2)(A)(ii), (B)(ii). Pub. L. 99–44, § 4(a)(2)(B), substituted “$4,800” for “$6,000” wherever appearing in text and heading.
Subsec. (d)(7)(A). Pub. L. 99–44, § 4(b)(1), inserted “placed in service after 1988” after “passenger automobile”.
Subsec. (d)(7)(B)(i). Pub. L. 99–44, § 4(b)(3), struck out last sentence which directed that in the case of calendar year 1984, the automobile price inflation adjustment would be zero.
Subsec. (d)(7)(B)(i)(II). Pub. L. 99–44, § 4(b)(2), substituted “1987” for “1983”.
Pub. L. 111–240, title II, § 2043(b),Sept. 27, 2010, 124 Stat. 2560, provided that: “The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2009.”
Amendment by Pub. L. 107–147applicable to property placed in service after Dec. 31, 2001, see section 602(c) ofPub. L. 107–147, set out as a note under section 30 of this title.
Pub. L. 105–34, title IX, § 971(b),Aug. 5, 1997, 111 Stat. 897, as amended by Pub. L. 107–147, title VI, § 602(b)(2),Mar. 9, 2002, 116 Stat. 59, provided that: “The amendments made by this section [amending this section] shall apply to property placed in service after the date of enactment of this Act [Aug. 5, 1997].”
Pub. L. 101–239, title VII, § 7643(b),Dec. 19, 1989, 103 Stat. 2381, provided that: “The amendment made by subsection (a) [amending this section] shall apply to property placed in service or leased in taxable years beginning after December 31, 1989.”
Amendment by section 201(d)(4) ofPub. L. 99–514applicable to property placed in service after Dec. 31, 1986, in taxable years ending after such date, with exceptions, see sections 203 and 204 ofPub. L. 99–514, set out as a note under section 168 of this title.
Amendment by section 201(d)(4) ofPub. L. 99–514not applicable to any property placed in service before Jan. 1, 1994, if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) ofPub. L. 99–514, set out as a note under section 46 of this title.
Amendment by section 1812(e)(1)(A), (C), (2)–(5) of Pub. L. 99–514effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 ofPub. L. 99–514, set out as a note under section 48 of this title.
Pub. L. 99–44, § 6(e),May 24, 1985, 99 Stat. 79, provided that:
Pub. L. 98–369, div. A, title I, § 179(d),July 18, 1984, 98 Stat. 719, provided that: