[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2319 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2319
To amend the Internal Revenue Code of 1986 to allow taxpayers to
expense property eligible for bonus depreciation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 12, 2005
Mr. Weller 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 taxpayers to
expense property eligible for bonus depreciation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXPENSING OF PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.
(a) In General.--So much of subsection (k) of section 168 of the
Internal Revenue Code of 1986 (relating to special allowance for
certain property acquired after September 10, 2001, and before January
1, 2005) as precedes paragraph (2)(D) thereof is amended to read as
follows:
``(k) Expensing of Certain Property Acquired After May 12, 2005.--
``(1) In general.--In the case of any qualified property--
``(A) the depreciation deduction provided by
section 167(a) for the taxable year in which such
property is placed in service shall include an
allowance equal to 100 percent of the adjusted basis of
the qualified property, and
``(B) the adjusted basis of the qualified property
shall be reduced by the amount of such deduction before
computing the amount otherwise allowable as a
depreciation deduction under this chapter for such
taxable year and any subsequent taxable year.
``(2) Qualified property.-- For purposes of this
subsection--
``(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, or
``(IV) which is qualified leasehold
improvement property,
``(ii) the original use of which commences
with the taxpayer after May 12, 2005,
``(iii) which is acquired by the taxpayer
after such date, but only if no written binding
contract for the acquisition was in effect on
or before such date.
``(B) Certain aircraft.--The term `qualified
property' includes property--
``(i) which meets the requirements of
clauses (ii) and (iii) of subparagraph (A),
``(ii) which is an aircraft which is not
used in the trade or business of transporting
persons or property other than for agricultural
or firefighting purposes,
``(iii) which is purchased and on which
such purchaser, at the time of the contract for
purchase, has made a nonrefundable deposit of
the lesser of--
``(I) 10 percent of the cost, or
``(II) $100,000, and
``(iv) which has--
``(I) an estimated production
period exceeding 4 months, and
``(II) a cost exceeding
$200,000.''.
(b) Technical Amendments.--
(1) Paragraph (2) of section 168(k) of such Code is amended
by redesignating subparagraphs (D), (E), (F), and (G) as
subparagraphs (C), (D), (E), and (F), respectively.
(2) Subparagraph (C) of section 168(k)(2) of such Code, as
redesignated by paragraph (1), is amended by striking the last
sentence of clause (iii), by striking clause (ii), and by
redesignating clause (iii) as clause (ii).
(3) Clause (i) of section 168(k)(2)(D) of such Code, as so
redesignated, is amended by striking ``and before January 1,
2005''.
(4) Subparagraph (D) of section 168(k)(2) of such Code, as
so redesignated, is amended by striking ``September 10, 2001''
each place it appears and inserting.
(5) Clause (i) of section 168(k)(2)(E) of such Code, as so
redesignated, is amended by striking ``$4,600'' and inserting
``$14,540''.
(6) Section 168(k) of such Code is amended by striking
paragraph (4).
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after May 12, 2005.
SEC. 2. LONG-TERM CONTRACT ACCOUNTING.
(a) In General.--Section 168(k)(2) of the Internal Revenue Code of
1986 is amended by adding after subparagraph (F), as redesignated by
section 1, the following new subparagraph:
``(F) Long-term contract accounting.--The
percentage of completion method under section 460 shall
be applied as if this subsection had not been
enacted.''.
SEC. 3. ELECTION TO INCREASE MINIMUM TAX CREDIT LIMITATION IN LIEU OF
BONUS DEPRECIATION.
(a) In General.--Section 53 of the Internal Revenue Code of 1986
(relating to credit for prior year minimum tax liability) is amended by
adding at the end of the following new subsection:
``(e) Additional Credit in Lieu of Bonus Depreciation.--
``(1) In general.--In the case of a corporation making an
election under this subsection for a taxable year, the
limitation under subsection (c) shall be increased by an amount
equal to the bonus depreciation amount.
``(2) Bonus depreciation amount.--For purposes of paragraph
(1), the bonus depreciation amount for any taxable year is an
amount equal to the product of--
``(A) 35 percent, and
``(B) the excess (if any) of--
``(i) the aggregate amount of depreciation
which would be determined under section 167 for
property placed in service during such taxable
year if no election under this subsection were
made, over
``(ii) the aggregate allowance for
depreciation allowable with respect to such
property placed in service for such taxable
year.
``(3) Election.--Section 168(k) (other than paragraph
(2)(E) thereof) shall not apply to any property placed in
service during a taxable year by a corporation making an
election under this subsection for such taxable year. An
election under this subsection may only be revoked with the
consent of the Secretary.
``(4) Credit refundable.--The aggregate increase in the
credit allowed by this section for any taxable year by reason
of this subsection shall for purposes of this title (other than
subsection (b)(2) of this section) be treated as a credit
allowed to the taxpayer under subpart C.''.
(b) Conforming Amendments.--Subsection (k) of section 168 of such
Code is amended by adding at the end the following new paragraph:
``(4) Cross reference.--For an election to claim certain
minimum tax credits in lieu of the allowance determined under
this subsection, see section 53(e).''.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall apply to taxable years ending
after May 12, 2005.
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