Election to expense certain depreciable business assets

A taxpayer may elect to treat the cost of any section 179 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 section 179 property is placed in service. The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $2,500,000. The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by the amount by which the cost of section 179 property placed in service during such taxable year exceeds $4,000,000. The amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year. The amount allowable as a deduction under subsection (a) for any taxable year shall be increased by the lesser of— the excess (if any) of— For purposes of this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the deduction allowable under this section. In the case of a husband and wife filing separate returns for the taxable year— The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000. For purposes of subparagraph (A)— The term “sport utility vehicle” means any 4-wheeled vehicle— Such term does not include any vehicle which— In the case of any taxable year beginning after 2018 (2025 in the case of the dollar amounts in paragraphs (1) and (2)), the dollar amounts in paragraphs (1), (2), and (5)(A) shall each be increased by an amount equal to— the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof— The amount of any increase under subparagraph (A) shall be rounded to the nearest multiple of $10,000 ($100 in the case of any increase in the amount under paragraph (5)(A)). An election under this section for any taxable year shall— Any election made under this section, and any specification contained in any such election, may be revoked by the taxpayer with respect to any property, and such revocation, once made, shall be irrevocable. For purposes of this section, the term “section 179 property” means property— which is— which is— For purposes of paragraph (1), the term “purchase” means any acquisition of property, but only if— the basis of the property in the hands of the person acquiring it is not determined— For purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring such property. This section shall not apply to estates and trusts. This section shall not apply to any section 179 property which is purchased by a person who is not a corporation and with respect to which such person is the lessor unless— For purposes of subsection (b) of this section— For purposes of paragraphs (2) and (6), the term “controlled group” has the meaning assigned to it by section 1563(a), except that, for such purposes, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in section 1563(a)(1). In the case of a partnership, the limitations of subsection (b) shall apply with respect to the partnership and with respect to each partner. A similar rule shall apply in the case of an S corporation and its shareholders. No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a). The Secretary shall, by regulations, provide for recapturing the benefit under any deduction allowable under subsection (a) with respect to any property which is not used predominantly in a trade or business at any time. For purposes of this section, the term “qualified real property” means— any of the following improvements to nonresidential real property placed in service after the date such property was first placed in service: