HR 5906
110th CONGRESS
2d Session
H. R. 5906
To amend the Internal Revenue Code of 1986 to allow the expensing
of certain real property.
IN THE HOUSE OF REPRESENTATIVES
April 24, 2008
Mr. FOSSELLA (for himself, Mr. BOREN, and Mr. HERGER) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow the expensing
of certain real property.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Small Business Capitol Expansion and Improvement
Act of 2008'.
SEC. 2. EXPENSING FOR CERTAIN REAL PROPERTY.
(a) In General- Part VI of subchapter B of chapter 1 is amended by inserting
after section 179E the following new section:
`SEC. 179F. ELECTION TO EXPENSE CERTAIN REAL PROPERTY.
`(a) Treatment as Expenses- In the case of a taxpayer described in subsection
(e), the taxpayer may elect to treat the cost of any qualified real property
as an expense which is not chargeable to capital account. Any cost so treated
shall be allowed as a deduction for the taxable year in which the qualified
real property is placed in service.
`(1) IN GENERAL- The aggregate cost which may be taken into account under
subsection (a) for any taxable year shall not exceed $125,000.
`(2) INFLATION ADJUSTMENT-
`(A) IN GENERAL- In the case of any taxable year beginning in a calendar
year after 2009, the $125,000 amount in paragraph (1) shall be increased
by an amount equal to--
`(i) such dollar amount, multiplied by
`(ii) the cost-of-living adjustment determined under section 1(f)(3)
for the calendar year in which the taxable year begins, by substituting
`calendar year 2008' for `calendar year 1992' in subparagraph (B) thereof.
`(B) ROUNDING- If any amount as adjusted under subparagraph (A) is not
a multiple of $1,000, such amount shall be rounded to the nearest multiple
of $1,000.
`(1) IN GENERAL- An election under this section for any taxable year shall
be made on the taxpayer's return of the tax imposed by this chapter for
the taxable year. Such election shall specify the qualified real property
to which the election applies and shall be made in such manner as the Secretary
may by regulations prescribe.
`(2) ELECTION IRREVOCABLE- Any election made under this section may not
be revoked except with the consent of the Secretary.
`(d) Qualified Real Property- For purposes of this section, the term `qualified
real property' means section 1250 property (as defined by section 1250(c))
located in the United States--
`(1) the original use of which commences with the taxpayer, and
`(2) which is placed in service by the taxpayer after the date of the enactment
of this section.
`(1) IN GENERAL- A taxpayer is described in this subsection if, for the
immediately prior taxable year, the taxpayer (or any predecessor) met the
$5,000,000 gross receipts test of paragraph (2).
`(2) $5,000,000 GROSS RECEIPTS TEST- For purposes of paragraph (1)--
`(A) IN GENERAL- A taxpayer meets the $5,000,000 gross receipts test of
this paragraph for a taxable year if the average annual gross receipts
of the taxpayer for the 3-taxable-year period ending with such taxable
year does not exceed $5,000,000.
`(B) AGGREGATION RULES- All persons treated as a single employer under
subsection (a) or (b) of section 52 or subsection (m) or (o) of section
414 shall be treated as one person for purposes of subparagraph (A).
`(C) NOT IN EXISTENCE FOR ENTIRE 3-YEAR PERIOD- If the taxpayer was not
in existence for the entire 3-year period referred to in subparagraph
(A), such paragraph shall be applied on the basis of the period during
which the taxpayer (or trade or business) was in existence.
`(D) SPECIAL RULES- For purposes of subparagraph (A), the rules of paragraph
(3) of section 448(c) shall apply.
`(f) Reporting- No deduction shall be allowed under subsection (a) to any
taxpayer for any taxable year unless the taxpayer files with the Secretary
a report containing such information as the Secretary shall require.'.
(b) Conforming Amendments-
(1) Section 263(a)(1) is amended by striking `or' at the end of subparagraph
(K), by striking the period at the end of subparagraph (L) and inserting
`, or', and by inserting after subparagraph (L) the following new subparagraph:
`(M) expenditures for which a deduction is allowed under section 179F.'.
(2) Section 312(k)(3)(B) is amended by striking `or 179E' each place it
appears in the heading and text thereof and inserting `179E, or 179F'.
(3) The table of sections for part VI of subchapter B of chapter 1 is amended
by inserting after the item relating to section 179E the following new item:
`Sec. 179F. Election to expense certain real property.'.
(c) Effective Date- The amendments made by this section shall apply to costs
paid or incurred after the date of the enactment of this Act.
END
