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Electronic Code of Federal Regulations

e-CFR Data is current as of September 29, 2014

Title 26Chapter ISubchapter APart 1 → §1.168(k)-0


Title 26: Internal Revenue
PART 1—INCOME TAXES (CONTINUED)


§1.168(k)-0   Table of contents.

This section lists the headings that appear in §1.168(k)-1.

§1.168(k)-1   Additional first year depreciation deduction.

(a) Scope and definitions.

(1) Scope.

(2) Definitions.

(b) Qualified property or 50-percent bonus depreciation property.

(1) In general.

(2) Description of qualified property or 50-percent bonus depreciation property.

(i) In general.

(ii) Property not eligible for additional first year depreciation deduction.

(A) Property that is not qualified property.

(B) Property that is not 50-percent bonus depreciation property.

(3) Original use.

(i) In general.

(ii) Conversion to business or income-producing use.

(A) Personal use to business or income-producing use.

(B) Inventory to business or income-producing use.

(iii) Sale-leaseback, syndication, and certain other transactions.

(A) Sale-leaseback transaction.

(B) Syndication transaction and certain other transactions.

(C) Sale-leaseback transaction followed by a syndication transaction and certain other transactions.

(iv) Fractional interests in property.

(v) Examples.

(4) Acquisition of property.

(i) In general.

(A) Qualified property.

(B) 50-percent bonus depreciation property.

(ii) Definition of binding contract.

(A) In general.

(B) Conditions.

(C) Options.

(D) Supply agreements.

(E) Components.

(iii) Self-constructed property.

(A) In general.

(B) When does manufacture, construction, or production begin.

(1) In general.

(2) Safe harbor.

(C) Components of self-constructed property.

(1) Acquired components.

(2) Self-constructed components.

(iv) Disqualified transactions.

(A) In general.

(B) Related party defined.

(v) Examples.

(5) Placed-in-service date.

(i) In general.

(ii) Sale-leaseback, syndication, and certain other transactions.

(A) Sale-leaseback transaction.

(B) Syndication transaction and certain other transactions.

(C) Sale-leaseback transaction followed by a syndication transaction and certain other transactions.

(iii) Technical termination of a partnership.

(iv) Section 168(i)(7) transactions.

(v) Example.

(c) Qualified leasehold improvement property.

(1) In general.

(2) Certain improvements not included.

(3) Definitions.

(d) Computation of depreciation deduction for qualified property or 50-percent bonus depreciation property.

(1) Additional first year depreciation deduction.

(i) In general.

(ii) Property having a longer production period.

(iii) Alternative minimum tax.

(2) Otherwise allowable depreciation deduction.

(i) In general.

(ii) Alternative minimum tax.

(3) Examples.

(e) Election not to deduct additional first year depreciation.

(1) In general.

(i) Qualified property.

(ii) 50-percent bonus depreciation property.

(2) Definition of class of property.

(3) Time and manner for making election.

(i) Time for making election.

(ii) Manner of making election.

(4) Special rules for 2000 or 2001 returns.

(5) Failure to make election.

(6) Alternative minimum tax.

(7) Revocation.

(i) In general.

(ii) Automatic 6-month extension.

(f) Special rules.

(1) Property placed in service and disposed of in the same taxable year.

(i) In general.

(ii) Technical termination of a partnership.

(iii) Section 168(i)(7) transactions.

(iv) Examples.

(2) Redetermination of basis.

(i) Increase in basis.

(ii) Decrease in basis.

(iii) Definition.

(iv) Examples.

(3) Section 1245 and 1250 depreciation recapture.

(4) Coordination with section 169.

(5) Like-kind exchanges and involuntary conversions.

(i) Scope.

(ii) Definitions.

(iii) Computation.

(A) In general.

(B) Year of disposition and year of replacement.

(C) Property having a longer production period.

(D) Alternative minimum tax.

(iv) Sale-leasebacks.

(v) Acquired MACRS property or acquired computer software that is acquired and placed in service before disposition of involuntarily converted MACRS property or involuntarily converted computer software.

(A) Time of replacement.

(B) Depreciation of acquired MACRS property or acquired computer software.

(vi) Examples.

(6) Change in use.

(i) Change in use of depreciable property.

(ii) Conversion to personal use.

(iii) Conversion to business or income-producing use.

(A) During the same taxable year.

(B) Subsequent to the acquisition year.

(iv) Depreciable property changes use subsequent to the placed-in-service year.

(v) Examples.

(7) Earnings and profits.

(8) Limitation of amount of depreciation for certain passenger automobiles.

(9) Section 754 election.

(10) Coordination with section 47.

(11) Coordination with section 514(a)(3).

(g) Effective date.

(1) In general.

(2) Technical termination of a partnership or section 168(i)(7) transactions.

(3) Like-kind exchanges and involuntary conversions.

(4) Change in method of accounting.

(i) Special rules for 2000 or 2001 returns.

(ii) Like-kind exchanges and involuntary conversions.

(5) Revisions to paragraphs (b)(3)(ii)(B) and (b)(5)(ii)(B).

(6) Rehabilitation credit.

[T.D. 9091, 68 FR 52991, Sept. 8, 2003. Redesignated and amended by T.D. 9283, 71 FR 51738, Aug. 31, 2006]



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