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:

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. (b)

Limitation

(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. (c)

Election

(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. (e)

Taxpayer described

(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.