Short title

This Act may be cited as the

Expensing Property Expands our Nation’s Strong Economy Act of 2005

or as the

EXPENSE Act of 2005

Repeal of certain limitations on the expensing of section 179 property

(a)

In general

Section 179 of the Internal Revenue Code of 1986 is amended by striking subsection (b) and by redesignating subsections (c) and (d) as subsections (b) and (c), respectively. (b)

Conforming amendments

(1)Subsection (c) of section 179 of such Code, as redesignated by subsection (a), is amended by striking paragraphs (6) and (8), and by redesignating paragraphs (7), (9), and (10) as paragraphs (6), (7), and (8), respectively. (2)Paragraph (6) of section 179 of such Code, as redesignated by paragraph (1) and subsection (a), is amended by striking paragraphs (2) and (6) and inserting paragraph (2). (3)Sections 42(d)(2)(B)(i), 1397D(d)(1), 1400B(b)(4)(A)(i) and 1400F(b)(4)(A)(i) of such Code are each amended by striking section 179(d)(2) and inserting section 179(c)(2). (4)Subclause (I) of section 42(d)(2)(D)(iii) of such Code is amended— (A)by striking section 179(d) and inserting section 179(c), and (B)by striking section 179(d)(7) and inserting section 179(c)(6). (5) (A)Subpart B of part III of subchapter U of chapter 1 of such Code is hereby repealed. (B)The table of subparts for such part III is amended by striking the item relating to subpart B. (6) (A)Part III of subchapter X of chapter 1 of such Code is amended by striking section 1400J. (B)The table of sections for such part is amended by striking the item relating to section 1400J. (C)Paragraph (3) of section 1400E(b) of such Code is amended by striking sections 1400F and 1400J and inserting section 1400F. (7)Clause (iv) of section 1400L(b)(2)(A) of such Code is amended by striking section 179(d) and inserting section 179(c). (8)Section 1400L of such Code is amended by striking subsection (f). (c)

Effective date

The amendments made by this section shall apply to property placed in service during taxable years ending on or after the date of the enactment of this Act.

Election of shorter recovery period for purpose of determining depreciation deduction

(a)

In general

Section 168 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(l)

Election of shorter recovery period

(1)

In general

Notwithstanding subsections (c), (e), (g), and (j), for purposes of subsection (a), the applicable recovery period for any property placed in service during a taxable year ending on or after the date of the enactment of this subsection shall not exceed any period of 2 or more years elected by the taxpayer with respect to such property. (2)

Election

An election made under this subsection shall be made at such time and in such form and manner as the Secretary may require. An election under this subsection, once made, shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary. (3)

Transition rule

In the case of any property placed in service during a taxable year ending before the date of the enactment of this subsection, paragraph (1) shall apply with respect to the adjusted basis of such property in the same manner as if such property (with such adjusted basis) were placed in service on the first day of the taxable year which includes the date of the enactment of this subsection. The application of this paragraph shall not be treated as a change in method of accounting for purposes of section 481.

(b)

Effective date

The amendment made by this section shall apply to property placed in service before, on, or after the date of the enactment of this Act.