You can elect to amortize the cost of a certified pollution control facility over 60 months. However, see Atmospheric pollution control facilities for an exception. The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. Also, you can claim a special depreciation allowance on a certified pollution control facility that is qualified property even if you elect to amortize its cost. You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. See chapter 3 of Publication 946.
A certified pollution control facility is a new identifiable treatment facility used in connection with a plant or other property in operation before 1976, to reduce or control water or atmospheric pollution or contamination. The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. The facility must be certified by state and federal certifying authorities.
The facility must not significantly increase the output or capacity, extend the useful life, or reduce the total operating costs of the plant or other property. Also, it must not significantly change the nature of the manufacturing or production process or facility.
The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). The federal certifying authority will describe the nature of the potential cost recovery. You must then reduce the amortizable basis of the facility by this potential recovery. taxmap/pubs/p535-046.htm#en_us_publink1000158921
A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. It does not include a building and its structural components unless the building is exclusively a treatment facility. taxmap/pubs/p535-046.htm#en_us_publink1000158922
Certain atmospheric pollution control facilities can be amortized over 84 months. To qualify, the following must apply.
- The facility must be acquired and placed in service after April 11, 2005. If acquired, the original use must begin with you after April 11, 2005.
- The facility must be used in connection with an electric generation plant or other property placed in operation after December 31, 1975, that is primarily coal fired.
- If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies.
A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. taxmap/pubs/p535-046.htm#en_us_publink1000158924
For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations.