[Federal Register Volume 69, Number 149 (Wednesday, August 4, 2004)]
[Rules and Regulations]
[Pages 46982-46986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17539]



[[Page 46982]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 602

[TD 9146]
RIN 1545-BD35


Section 179 Elections

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains temporary regulations relating to the 
election to expense the cost of property subject to section 179 of the 
Internal Revenue Code. The regulations reflect changes to the law made 
by section 202 of the Jobs and Growth Tax Relief Reconciliation Act of 
2003. The text of these temporary regulations also serves as the text 
of the proposed regulations set forth in the notice of proposed 
rulemaking on this subject in the Proposed Rules section in this issue 
of the Federal Register.

DATES: Effective Dates: These regulations are effective August 4, 2004.
    Applicability Dates: For dates of applicability, see Sec.  1.179-
6T.

FOR FURTHER INFORMATION CONTACT: Winston H. Douglas, (202) 622-3110 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    These temporary regulations are being issued without prior notice 
and public procedure pursuant to the Administrative Procedure Act (5 
U.S.C. 553). For this reason, the collection of information contained 
in these regulations has been reviewed and, pending receipt and 
evaluation of public comments, approved by the Office of Management and 
Budget under control number 1545-1201. Responses to this collection of 
information are required to obtain a benefit.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number.
    For further information concerning this collection of information, 
where to submit comments on the collection of information and the 
accuracy of the estimated burden, and suggestions for reducing this 
burden, please refer to the preamble to the cross-referencing notice of 
proposed rulemaking published in the Proposed Rules section in this 
issue of the Federal Register.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, Federal tax 
returns and tax return information are confidential pursuant to 26 
U.S.C. 6103.

Background

    This document contains amendments to 26 CFR part 1 to provide 
regulations under section 179 of the Internal Revenue Code (Code). 
These amendments reflect the changes to the law made by section 202 of 
the Jobs and Growth Tax Relief Reconciliation Act of 2003, Public Law 
108-27 (117 Stat. 752).
    Prior to the enactment of the Jobs and Growth Tax Relief 
Reconciliation Act of 2003 (JGTRRA) (117 Stat. 752), section 179 
provided that, in lieu of depreciation under section 168 (MACRS 
depreciation) for taxable years beginning in 2003 and thereafter, a 
taxpayer with a sufficiently small amount of current year investment in 
section 179 property could elect to deduct up to $25,000 of the cost of 
section 179 property placed in service by the taxpayer for the taxable 
year. In general, section 179 property was defined as depreciable 
tangible personal property that was purchased for use in the active 
conduct of a trade or business. The $25,000 amount was reduced (but not 
below zero) by the amount by which the cost of section 179 property 
placed in service by the taxpayer during the taxable year exceeded 
$200,000. The election under section 179 generally was made on the 
taxpayer's original Federal tax return for the taxable year to which 
the election related, required specific information to be provided at 
the time the election was made, and could only be revoked with the 
consent of the Commissioner of Internal Revenue.
    The changes made to section 179 by section 202 of JGTRRA are 
applicable for section 179 property placed in service by a taxpayer in 
taxable years beginning after 2002 and before 2006. Section 202 of 
JGTRRA expands the definition of section 179 property to include off-
the-shelf computer software (a category of intangible property) and 
increases the $25,000 and $200,000 amounts to $100,000 and $400,000, 
respectively. In addition, the $100,000 and $400,000 amounts are 
indexed annually for inflation for taxable years beginning after 2003 
and before 2006. JGTRRA also modifies section 179 to provide that any 
election or specification for taxable years beginning after 2002 and 
before 2006 may be revoked by the taxpayer with respect to any section 
179 property, and that such revocation, once made, shall be 
irrevocable. The conference agreement (H.R. Conf. Rep. No. 108-126, at 
35 (2003)) states that a taxpayer may make or revoke an expensing 
election on an amended Federal tax return without the consent of the 
Commissioner.

Explanation of Provisions

    For taxable years beginning after 2002 and before 2006, the 
regulations reflect the change to section 179(d)(1) by including off-
the-shelf computer software in the definition of section 179 property, 
and the changes to sections 179(b)(1) and (2) by increasing the 
respective amounts to $100,000 and $400,000. The regulations also 
provide guidance for making and revoking elections under section 179 
for those taxable years. Several examples are provided to illustrate 
how taxpayers may make and revoke their section 179 elections. 
Additionally, each year the IRS will publish the annual inflation 
indexed amounts for sections 179(b)(1) and (2). For the inflation 
indexed amounts for taxable years beginning in 2004, see Rev. Proc. 
2003-85, 2003-49 I.R.B. 1184.

Making or Revoking Section 179 Elections on Amended Federal Tax Returns

    Prior to the enactment of JGTRRA, an election to expense the cost 
of property under section 179 generally was made on the taxpayer's 
original federal tax return for the taxable year to which the election 
applied. An election could only be revoked with the consent of the 
Commissioner. The section 179 regulations (pre-JGTRRA) provided that a 
revocation of an election would only be granted in extraordinary 
circumstances.
    Small business taxpayers are often unaware of the advantages or 
disadvantages of section 179 expensing. Some taxpayers may not have 
been aware of the section 179 election until after filing an original 
Federal tax return. In addition, making the section 179 election is not 
always to a taxpayer's advantage. For example, the section 179 election 
may prevent the taxpayer from fully using exemptions and deductions, 
reduce a taxpayer's coverage under the social security system, and make 
various tax credits unusable. See Internal Revenue Service, Publication 
946, ``How to Depreciate Property (For use in preparing 2003 
Returns)'', p. 14, and ``General Explanations of the Administration's 
Fiscal Year 2004 Revenue Proposals'', Department of the Treasury, p. 23 
(February 2003).

[[Page 46983]]

    Permitting taxpayers to make or revoke section 179 elections on 
amended Federal tax returns without the consent of the Commissioner 
reflects Congress's intent ``that the process of making and revoking 
section 179 elections should be made simpler and more efficient for 
taxpayers.'' H.R. Rep. No. 108-94, at 25 and 26 (2003) and S. Prt. No. 
108-26, at 10 (2003). Such a process will provide flexibility to small 
business taxpayers in determining whether the section 179 election is 
to their advantage or disadvantage.
    Section 1.179-5T(c)(1) establishes the time period during which a 
taxpayer may make or revoke a section 179 election on an amended 
Federal tax return.
    Section 1.179-5T(c)(2) provides that a section 179 election made on 
an amended Federal tax return must specify the item of section 179 
property to which the election applies and the portion of the cost of 
each such item to be taken into account under section 179. Further, if 
a taxpayer elected to expense only a portion of the cost basis of an 
item of section 179 property for a particular taxable year (or did not 
elect to expense any portion of the cost basis of an item of section 
179 property), Sec.  1.179-5T(c)(2) allows the taxpayer to file an 
amended Federal tax return and expense any portion of the cost basis of 
an item of section 179 property that was not expensed pursuant to a 
prior section 179 election. Any such increase in the amount expensed 
under section 179 is not deemed to be a revocation of the prior 
election for that particular taxable year.
    Section 1.179-5T(c)(3) provides that any election under section 
179, or specification of such election, for any taxable year beginning 
after 2002 and before 2006 for any item of section 179 property may be 
revoked by the taxpayer on an amended Federal tax return without the 
Commissioner's consent and that such revocation, once made, is 
irrevocable. For this purpose, a specification refers to both the 
selected specific item of section 179 property subject to a section 179 
election and a selected dollar amount allocable to the specific item of 
section 179 property. In addition, Sec.  1.179-5T(c)(3) describes the 
circumstances under which partial and entire revocations of elections 
and specifications occur. Section 1.179-5T(c)(3) also discusses the 
effect of a revocation of an election under section 179 or a revocation 
of any specification of such election.
    Section 1.179-5T(c)(4) sets forth examples illustrating the rules 
of paragraphs (c)(1), (2), and (3).
    Section 1.179-6T provides the applicability dates for the 
provisions of Sec. Sec.  1.179-2T, 1.179-4T, and 1.179-5T.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) of the Administrative Procedure Act (5 
U.S.C. chapter 5) does not apply to these regulations. For the 
applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), 
refer to the Special Analyses section of the preamble to the cross-
reference notice of proposed rulemaking published in the proposed rules 
section in this issue of the Federal Register. Pursuant to section 
7805(f) of the Code, these temporary regulations will be submitted to 
the Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

Drafting Information

    The principal author of these regulations is Winston H. Douglas, 
Office of Associate Chief Counsel (Passthroughs and Special 
Industries). However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

0
Accordingly, 26 CFR part 1 is amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 1.179-0 is amended as follows:
0
1. Paragraphs (b)(1) and (b)(2) of Sec.  1.179-2 are revised.
0
2. Section 1.179-2T is added.
0
3. Paragraph (a) of Sec.  1.179-4 is revised.
0
4. Section 1.179-4T is added.
0
5. Paragraph (c) of Sec.  1.179-5 is added.
0
6. Section 1.179-5T is added.
0
7. Section 1.179-6T is added.
    The revisions and additions read as follows:


Sec.  1.179-0  Table of contents for section 179 expensing rules.

* * * * *


Sec.  1.179-2  Limitations on amount subject to section 179 election.

* * * * *
    (b) * * *
    (1) [Reserved].
    (2) [Reserved].
* * * * *


Sec.  1.179-2T  Limitations on amount subject to section 179 election 
(temporary).

    (a) [Reserved].
    (b) Dollar Limitation.
    (1) In general.
    (2) Excess section 179 property.
    (3) through (d) [Reserved].
* * * * *


Sec.  1.179-4  Definitions.

    (a) Section 179 property [Reserved].
* * * * *


Sec.  1.179-4T  Definitions.

    (a) Section 179 property.
    (b) through (f) [Reserved].


Sec.  1.179-5  Time and manner of making election.

* * * * *
    (c) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006.


Sec.  1.179-5T  Time and manner of making election.

    (a) and (b) [Reserved].
    (c) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006.
* * * * *


Sec.  1.179-6T  Effective dates.

    (a) In general.
    (b) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006.

0
Par. 3. Section 1.179-2 is amended by revising paragraphs (b)(1) and 
(b)(2)(ii) to read as follows:


Sec.  1.179-2  Limitations on amount subject to section 179 election.

* * * * *
    (b) * * *
    (1) [Reserved]. For further guidance, see Sec.  1.179-2T(b)(1).
    (2) * * *
    (i) * * *
    (ii) [Reserved]. For further guidance, see Sec.  1.179-
2T(b)(2)(ii).
* * * * *

0
Par. 4. Section 1.179-2T is added to read as follows:


Sec.  1.179-2T  Limitations on amount subject to section 179 election 
(temporary).

    (a) [Reserved]. For further guidance, see Sec.  1.179-2(a).

[[Page 46984]]

    (b) Dollar limitation--(1) In general. The aggregate cost of 
section 179 property that a taxpayer may elect to expense under section 
179 for any taxable year beginning in 2003 and thereafter is $25,000 
($100,000 in the case of taxable years beginning after 2002 and before 
2006 under section 179(b)(1), indexed annually for inflation under 
section179(b)(5) for taxable years beginning after 2003 and before 
2006), reduced (but not below zero) by the amount of any excess section 
179 property (described in paragraph (b)(2) of this section) placed in 
service during the taxable year.
    (b)(2) and (b)(2)(i) [Reserved]. For further guidance, see Sec.  
1.179-2(b)(2) and (b)(2)(i).
    (ii) $200,000 ($400,000 in the case of taxable years beginning 
after 2002 and before 2006 under section 179(b)(2), indexed annually 
for inflation under section 179(b)(5) for taxable years beginning after 
2003 and before 2006).
    (b)(3) through (d) [Reserved]. For further guidance, see Sec.  
1.179-2(b)(3) through (d).

0
Par. 5. Section 1.179-4 is amended by revising paragraph (a) to reads 
as follows:


Sec.  1.179-4  Definitions.

* * * * *
    (a) [Reserved]. For further guidance, see Sec.  1.179-4T(a).
* * * * *

0
Par. 6. Section 1.179-4T is added to read as follows:


Sec.  1.179-4T  Definitions (temporary).

    The following definitions apply for purposes of section 179, 
Sec. Sec.  1.179-1 through 1.179-6, and Sec.  1.179-2T, 5T, and 6T:
    (a) Section 179 property. The term section 179 property means any 
tangible property described in section 179(d)(1) that is acquired by 
purchase for use in the active conduct of the taxpayer's trade or 
business (as described in Sec.  1.179-2(c)(6)). For taxable years 
beginning after 2002 and before 2006, the term section 179 property 
includes computer software described in section 179(d)(1) that is 
placed in service by the taxpayer in a taxable year beginning after 
2002 and before 2006 and is acquired by purchase for use in the active 
conduct of the taxpayer's trade or business (as described in Sec.  
1.179-2(c)(6)). For purposes of this paragraph (a), the term trade or 
business has the same meaning as in section 162 and the regulations 
thereunder.
    (b) through (f) [Reserved]. For further guidance, see Sec.  1.179-
4(b) through (f).

0
Par. 7. Section 1.179-5 is amended by adding paragraph (c) to read as 
follows:


Sec.  1.179-5  Time and manner of making election.

* * * * *
    (c) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006. [Reserved]. For 
further guidance, see Sec.  1.179-5T(c).

0
Par. 8. Section 1.179-5T is added to read as follows:


Sec.  1.179-5T  Time and manner of making election (temporary).

    (a)and (b) [Reserved]. For further guidance, see Sec.  1.179-5(a) 
and (b).
    (c) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006--(1) In general. For 
any taxable year beginning after 2002 and before 2006, a taxpayer is 
permitted to make or revoke an election under section 179 without the 
consent of the Commissioner on an amended Federal tax return for that 
taxable year. This amended return must be filed within the time 
prescribed by law for filing an amended return for such taxable year.
    (2) Election--(i) In general. For any taxable year beginning after 
2002 and before 2006, a taxpayer is permitted to make an election under 
section 179 on an amended Federal tax return for that taxable year 
without the consent of the Commissioner. Thus, the election under 
section 179 and Sec.  1.179-1 to claim a section 179 expense deduction 
for section 179 property may be made on an amended Federal tax return 
for the taxable year to which the election applies. The amended Federal 
tax return must include the adjustment to taxable income for the 
section 179 election and any collateral adjustments to taxable income 
or to the tax liability (for example, the amount of depreciation 
allowed or allowable in that taxable year for the item of section 179 
property to which the election pertains). Such adjustments must also be 
made on amended Federal tax returns for any affected succeeding taxable 
years.
    (ii) Specifications of election. Any election under section 179 
must specify the items of section 179 property and the portion of the 
cost of each such item to be taken into account under section 179(a). 
Any election under section 179 must comply with the specification 
requirements of section 179(c)(1)(A), Sec.  1.179-1(b), and Sec.  
1.179-5(a). If a taxpayer elects to expense only a portion of the cost 
basis of an item of section 179 property for a taxable year beginning 
after 2002 and before 2006 (or did not elect to expense any portion of 
the cost basis of the item of section 179 property), the taxpayer is 
permitted to file an amended Federal tax return for that particular 
taxable year and increase the portion of the cost of the item of 
section 179 property to be taken into account under section 179(a) (or 
elect to expense any portion of the cost basis of the item of section 
179 property if no prior election was made) without the consent of the 
Commissioner. Any such increase in the amount expensed under section 
179 is not deemed to be a revocation of the prior election for that 
particular taxable year.
    (3) Revocation--(i) In general. Section 179(c)(2) permits the 
revocation of an entire election or specification, or a portion of the 
selected dollar amount of a specification. The term specification in 
section 179(c)(2) refers to both the selected specific item of section 
179 property subject to a section 179 election and the selected dollar 
amount allocable to the specific item of section 179 property. Any 
portion of the cost basis of an item of section 179 property subject to 
an election under section 179 for a taxable year beginning after 2002 
and before 2006 may be revoked by the taxpayer without the consent of 
the Commissioner by filing an amended Federal tax return for that 
particular taxable year. The amended Federal tax return must include 
the adjustment to taxable income for the section 179 revocation and any 
collateral adjustments to taxable income or to the tax liability (for 
example, allowable depreciation in that taxable year for the item of 
section 179 property to which the revocation pertains). Such 
adjustments must also be made on amended Federal tax returns for any 
affected succeeding taxable years. Reducing or eliminating a specified 
dollar amount for any item of section 179 property with respect to any 
taxable year beginning after 2002 and before 2006 results in a 
revocation of that specified dollar amount.
    (ii) Effect of revocation. Such revocation, once made, shall be 
irrevocable. If the selected dollar amount reflects the entire cost of 
the item of section 179 property subject to the section 179 election, a 
revocation of the entire selected dollar amount is treated as a 
revocation of the section 179 election for that item of section 179 
property and the taxpayer is unable to make a new section 179 election 
with respect to that item of property. If the selected dollar amount is 
a portion of the cost of the item of section 179 property, revocation 
of a selected dollar amount shall be treated as a revocation of only 
that selected dollar amount. The revoked dollars cannot be the subject 
of a new section 179 election for the same item of property.

[[Page 46985]]

    (4) Examples. The following examples illustrate the rules of this 
paragraph (c):

    Example 1. Taxpayer, a sole proprietor, owns and operates a 
jewelry store. During 2003, Taxpayer purchased and placed in service 
two items of section 179 property--a cash register costing $4,000 
(5-year MACRS property) and office furniture costing $10,000 (7-year 
MACRS property). On his 2003 Federal tax return filed on April 15, 
2004, Taxpayer elected to expense under section 179 the full cost of 
the cash register and, with respect to the office furniture, claimed 
the depreciation allowable. In November 2004, Taxpayer determines it 
would have been more advantageous to have made an election under 
section 179 to expense the full cost of the office furniture rather 
than the cash register. Pursuant to paragraph (c)(1) of this 
section, Taxpayer is permitted to file an amended Federal tax return 
for 2003 revoking the section 179 election for the cash register, 
claiming the depreciation allowable in 2003 for the cash register, 
and making an election to expense under section 179 the cost of the 
office furniture. The amended return must include an adjustment for 
the depreciation previously claimed in 2003 for the office 
furniture, an adjustment for the depreciation allowable in 2003 for 
the cash register, and any other collateral adjustments to taxable 
income or to the tax liability. In addition, once Taxpayer revokes 
the section 179 election for the entire cost basis of the cash 
register, Taxpayer can no longer expense under section 179 any 
portion of the cost of the cash register.
    Example 2. Taxpayer, a sole proprietor, owns and operates a 
machine shop that does specialized repair work on industrial 
equipment. During 2003, Taxpayer purchased and placed in service one 
item of section 179 property--a milling machine costing $135,000. On 
Taxpayer's 2003 Federal tax return filed on April 15, 2004, Taxpayer 
elected to expense under section 179 $5,000 of the cost of the 
milling machine and claimed allowable depreciation on the remaining 
cost. Subsequently, Taxpayer determines it would have been to 
Taxpayer's advantage to have elected to expense $100,000 of the cost 
of the milling machine on Taxpayer's 2003 Federal tax return. In 
November 2004, Taxpayer files an amended Federal tax return for 
2003, increasing the amount of the cost of the milling machine that 
is to be taken into account under section 179(a) to $100,000, 
decreasing the depreciation allowable in 2003 for the milling 
machine, and making any other collateral adjustments to taxable 
income or to the tax liability. Pursuant to paragraph (c)(2)(ii) of 
this section, increasing the amount of the cost of the milling 
machine to be taken into account under section 179(a) supplements 
the portion of the cost of the milling machine that was already 
taken into account by the original section 179 election made on the 
2003 Federal tax return and no revocation of any specification with 
respect to the milling machine has occurred.
    Example 3. Taxpayer, a sole proprietor, owns and operates a real 
estate brokerage business located in a rented storefront office. 
During 2003, Taxpayer purchases and places in service two items of 
section 179 property--a laptop computer costing $2,500 and a desktop 
computer costing $1,500. On Taxpayer's 2003 Federal tax return filed 
on April 15, 2004, Taxpayer elected to expense under section 179 the 
full cost of the laptop computer and the full cost of the desktop 
computer. Subsequently, Taxpayer determines it would have been to 
Taxpayer's advantage to have originally elected to expense under 
section 179 only $1,500 of the cost of the laptop computer on 
Taxpayer's 2003 Federal tax return. In November 2004, Taxpayer files 
an amended Federal tax return for 2003 reducing the amount of the 
cost of the laptop computer that was taken into account under 
section 179(a) to $1,500, claiming the depreciation allowable in 
2003 on the remaining cost of $1,000 for that item, and making any 
other collateral adjustments to taxable income or to the tax 
liability. Pursuant to paragraph (c)(3)(ii) of this section, the 
$1,000 reduction represents a revocation of a portion of the 
selected dollar amount and no portion of those revoked dollars may 
be the subject of a new section 179 election for the laptop 
computer.
    Example 4. Taxpayer, a sole proprietor, owns and operates a 
furniture making business. During 2003, Taxpayer purchases and 
places in service one item of section 179 property--an industrial-
grade cabinet table saw costing $5,000. On Taxpayer's 2003 Federal 
tax return filed on April 15, 2004, Taxpayer elected to expense 
under section 179 $3,000 of the cost of the saw and, with respect to 
the remaining $2,000 of the cost of the saw, claimed the 
depreciation allowable. In November 2004, Taxpayer files an amended 
Federal tax return for 2003 revoking the selected $3,000 amount for 
the saw, claiming the depreciation allowable in 2003 on the $3,000 
cost of the saw, and making any other collateral adjustments to 
taxable income or to the tax liability. Subsequently, in December 
2004, Taxpayer files a second amended Federal tax return for 2003 
selecting a new dollar amount of $2,000 for the saw, including an 
adjustment for the depreciation previously claimed in 2003 on the 
$2,000, and making any other collateral adjustments to taxable 
income or to the tax liability. Pursuant to paragraph (c)(2)(ii) of 
this section, Taxpayer is permitted to select a new selected dollar 
amount to expense under section 179 encompassing all or a part of 
the initially non-elected portion of the cost of the elected item of 
section 179 property. However, no portion of the revoked $3,000 may 
be the subject of a new section 179 dollar amount selection for the 
saw. In December 2005, Taxpayer files a third amended Federal tax 
return for 2003 revoking the entire selected $2,000 amount with 
respect to the saw, claiming the depreciation allowable in 2003 for 
the $2,000, and making any other collateral adjustments to taxable 
income or to the tax liability. Because Taxpayer elected to expense, 
and subsequently revoke, the entire cost basis of the saw, the 
section 179 election for the saw has been revoked and Taxpayer is 
unable to make a new section 179 election with respect to the saw.


0
Par. 9. Section 1.179-6T is added to read as follows:


Sec.  1.179-6T  Effective dates.

    (a) In general. Except as provided in paragraph (b) of this 
section, the provisions of Sec. Sec.  1.179-1 through 1.179-5 apply for 
property placed in service by the taxpayer in taxable years ending 
after January 25, 1993. However, a taxpayer may apply the provisions of 
Sec. Sec.  1.179-1 through 1.179-5 to property placed in service by the 
taxpayer after December 31, 1986, in taxable years ending on or before 
January 25, 1993. Otherwise, for property placed in service by the 
taxpayer after December 31, 1986, in taxable years ending on or before 
January 25, 1993, the final regulations under section 179 as in effect 
for the year the property was placed in service apply, except to the 
extent modified by the changes made to section 179 by the Tax Reform 
Act of 1986 (100 Stat. 2085), the Technical and Miscellaneous Revenue 
Act of 1988 (102 Stat. 3342) and the Revenue Reconciliation Act of 1990 
(104 Stat. 1388-400). For that property, a taxpayer may apply any 
reasonable method that clearly reflects income in applying the changes 
to section 179, provided the taxpayer consistently applies the method 
to the property.
    (b) Section 179 property placed in service by the taxpayer in a 
taxable year beginning after 2002 and before 2006. The provisions of 
Sec.  1.179-2T, 1.179-4T, and 1.179-5T, reflecting changes made to 
section 179 by the Jobs and Growth Tax Relief Reconciliation Act of 
2003 (117 Stat. 752), apply for property placed in service in taxable 
years beginning after 2002 and before 2006.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

0
Par. 10. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.


0
Par. 11. In Sec.  602.101, paragraph (b) is amended by adding the 
following entries in numerical order to the table to read as follows:


Sec.  602.101  OMB Control numbers.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                                             Current OMB
     CFR part or section where identified and described      control No.
------------------------------------------------------------------------
                                * * * * *
1.179-2T...................................................    1545-1201
                                * * * * *
1.179-5T...................................................    1545-1201
                                * * * * *
------------------------------------------------------------------------



[[Page 46986]]

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.

    Approved: July 21, 2004.
Gregory F. Jenner,
Acting Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 04-17539 Filed 8-3-04; 8:45 am]
BILLING CODE 4830-01-P