skip navigation

Search Help
Navigation Help


Main Topics
A B C D E F G H I
J K L M N O P Q R
S T U V W X Y Z #


FAQs
Forms
Publications
Tax Topics


Comments
About Tax Map
IRS Tax Map 2008
Current IRS Tax Map

taxmap/pubs/p946-014.htm#en_us_publink1000107458

Chapter 3
Claiming the Special Depreciation Allowance(p23)

spacer

taxmap/pubs/p946-014.htm#TXMP1284c86fIntroduction

You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. The allowance applies only for the first year you place the property in service. For qualified property placed in service in 2009, you can take an additional 50% (or 30%, if applicable) special allowance. The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service.
This chapter explains what is qualified property. It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance.
Deposit
Corporations and certain automotive partnerships can elect to accelerate certain research and minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance on page 32.
See chapter 6 for information about getting publications and forms.
taxmap/pubs/p946-014.htm#en_us_publink1000107459

What Is Qualified Property?(p24)


rule
spacer

Qualified Property

Words you may need to know (see Glossary)

Your property is qualified property if it is one of the following.
The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance.
taxmap/pubs/p946-014.htm#en_us_publink1000107460

Qualified Liberty Zone Property(p24)


rule
spacer

previous topic occurrence Liberty Zone next topic occurrence

You can take a special depreciation allowance for qualified Liberty Zone property placed in service before January 1, 2010, that is nonresidential real or residential rental property (defined next).
taxmap/pubs/p946-014.htm#en_us_publink1000107461

Nonresidential real property and residential rental property.(p24)


rule
spacer

This property is qualified Liberty Zone property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the events of September 11, 2001. Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned.
For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the attacks. Otherwise, the property is considered damaged real property. For example, if certain structural components of a building (such as walls, floors, and plumbing fixtures) were damaged or destroyed as a result of the attacks, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance
This property must also meet all of the tests that are discussed under Other Tests To Be Met below.
taxmap/pubs/p946-014.htm#en_us_publink1000107462

Other Tests To Be Met(p24)


rule
spacer

To be qualified Liberty Zone property, the property must also meet all of the following tests.
taxmap/pubs/p946-014.htm#en_us_publink1000107463

Acquisition date test.(p24)


rule
spacer

You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001.
Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000107464

Placed in service date test.(p24)


rule
spacer

The property must be placed in service for use in your trade or business before January 1, 2010.
taxmap/pubs/p946-014.htm#en_us_publink1000107465

Sale-leaseback.(p24)
spacer

If you sold qualified Liberty Zone property you placed in service after September 10, 2001, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before September 11, 2001.
taxmap/pubs/p946-014.htm#en_us_publink1000107466

Syndicated leasing transactions.(p24)
spacer

If qualified Liberty Zone property is originally placed in service by a lessor after September 10, 2001, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months.
For special rules explaining when property involved in certain other transactions is treated as originally placed in service, see section 1.168(k)-1(b)(5) of the regulations.
taxmap/pubs/p946-014.htm#en_us_publink1000107467

Substantial use test.(p24)


rule
spacer

Substantially all (80% or more) of the use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone.
EIC
If the property is held for the production of income, the property does not satisfy this substantial use test and does not qualify for the special depreciation allowance.
taxmap/pubs/p946-014.htm#en_us_publink1000107469

Original use test.(p25)


rule
spacer

The original use of the property in the Liberty Zone must have begun with you after  
September 10, 2001.
Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. However, the cost of reconditioned or rebuilt property you acquired does not meet this test. Property containing used parts will not be treated as reconditioned or rebuilt if the cost of the used parts is not more than 20% of the total cost of the property.
If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after you originally placed the property in service, the lessor is considered to be the original user of the property.
For special rules identifying the original user of property involved in certain other transactions and the original user of fractional interests in property, see section 1.168(k)-1(b)(3) of the regulations.
taxmap/pubs/p946-014.htm#en_us_publink1000107470

Excepted Property(p25)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified Liberty Zone property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000107471

Specified Gulf Opportunity Zone Extension Property(p25)


rule
spacer

Specified Gulf Opportunity Zone Extension Property

You can take a special depreciation allowance for specified Gulf Opportunity Zone (GO Zone) extension property (defined below) placed in service in specified portions of the GO Zone. Specified GO Zone extension property must meet certain tests, explained under Other Tests To Be Met on page 26. Also, specified GO Zone extension property cannot be excepted property, explained under Excepted Property on page 27.
taxmap/pubs/p946-014.htm#en_us_publink1000142159

Specified GO Zone extension property.(p25)


rule
spacer

Specified GO Zone extension property includes any of the following property.
In addition, substantially all (80% or more) of the use of the property described in (1) through (4) above must be in the building and placed in service no later than 90 days after the building is placed in service.
Specified portions of the GO Zone are those counties or parishes in the GO Zone that are identified by the IRS as having more than 60% of the occupied housing units damaged by the hurricanes occurring during 2005. For guidance identifying the affected counties and parishes eligible for the extension of the placed in service date, see Notice 2007-36 on page 1000 of the Internal Revenue Bulletin 2007-17, available at www.irs.gov/pub/irs-irbs/irb07-17.pdf.
taxmap/pubs/p946-014.htm#en_us_publink1000107472

Qualified leasehold improvement property.(p25)


rule
spacer

Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met.
However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following.
Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. However, a lease between related persons is not treated as a lease.
taxmap/pubs/p946-014.htm#en_us_publink1000107473

Related persons.(p26)
spacer

For this purpose, the following are related persons.
  1. Members of an affiliated group.
  2. An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant.
  3. A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation.
  4. Two corporations that are members of the same controlled group.
  5. A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust.
  6. The grantor and fiduciary, and the fiduciary and beneficiary, of any trust.
  7. The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts.
  8. A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization.
  9. Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation.
  10. A corporation and a partnership if the same persons own both of the following.
    1. 80% or more of the value of the outstanding stock of the corporation.
    2. 80% or more of the capital or profits interest in the partnership.
  11. The executor and beneficiary of any estate.
taxmap/pubs/p946-014.htm#en_us_publink1000107474

Other Tests To Be Met(p26)


rule
spacer

To be specified GO Zone extension property, the property must also meet all of the following tests.
taxmap/pubs/p946-014.htm#en_us_publink1000107475

Acquisition date test.(p26)


rule
spacer

You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) after August 27, 2005, with no binding written contract for the acquisition in effect before August 28, 2005.
Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after August 27, 2005. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000107476

Placed in service date test.(p26)


rule
spacer

The property must be placed in service before January 1, 2011, for use in your trade or business located in specified portions of the GO Zone.
taxmap/pubs/p946-014.htm#en_us_publink1000107478

Sale-leaseback.(p26)
spacer

If you sold specified GO Zone extension property you placed in service after August 27, 2005, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before August 28, 2005.
taxmap/pubs/p946-014.htm#en_us_publink1000107479

Syndicated leasing transactions.(p26)
spacer

If the property is originally placed in service by a lessor after August 27, 2005, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months.
taxmap/pubs/p946-014.htm#en_us_publink1000107480

Substantial use test.(p26)


rule
spacer

Substantially all (80% or more during each tax year) of the use of the property must be in the specified areas of GO Zone and in the active conduct of your trade or business in the GO Zone.
EIC
If the property is held for the production of income, the property does not satisfy this substantial use test and does not qualify for the special depreciation allowance.
taxmap/pubs/p946-014.htm#en_us_publink1000107482

Original use test.(p27)


rule
spacer

The original use of the property in the GO Zone must have begun with you after August 27, 2005.
Used property can be specified GO Zone extension property if it has not previously been used within the specified portions of the GO Zone. Also, additional capital expenditures you incurred after August 27, 2005, to recondition or rebuild your property meet the original use test if the original use of the property in the GO Zone began with you. For further guidance on the original use requirement for the GO Zone additional first year depreciation deduction, see Notice 2007-36 on page 1000 of Internal Revenue Bulletin 2007-17.
If you sold property you placed in service after August 27, 2005, and you leased it back within 3 months after you originally placed the property in service, the lessor is considered to be the original user of the property.
If you acquire new property for personal use and then use the property in your trade or business or for the production of income, you are considered to be the original user.
For special rules identifying the original user of property involved in certain other transactions and the original user of fractional interests in property, see Regulations section 1.168(k)-1(b)(3).
taxmap/pubs/p946-014.htm#en_us_publink1000107483

Excepted Property(p27)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Specified GO Zone extension property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000107484

Qualified revitalization building.(p27)


rule
spacer

This is a commercial building and its structural components that you placed in service in a renewal community. If the building is new, the original use of the building must begin with you. If the building is not new, you must substantially rehabilitate the building and then place it in service. For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see Publication 954, Tax Incentives for Distressed Communities.
taxmap/pubs/p946-014.htm#en_us_publink1000107485

Gambling or animal racing property.(p27)


rule
spacer

Gambling or animal racing property includes the following personal and real property.
taxmap/pubs/p946-014.htm#en_us_publink1000107486

Additional guidance.(p27)


rule
spacer

For additional guidance with respect to the 50% additional first-year depreciation deduction for qualified GO Zone property, see Notice 2006-77 on page 590 of Internal Revenue Bulletin 2006-40, available at www.irs.gov/pub/irs-irbs/irb06-40.pdf and Notice 2007-36 on page 1000 of Internal Revenue Bulletin 2007-17, available at www.irs.gov/pub/irs-irbs/irb07-17.pdf.
taxmap/pubs/p946-014.htm#en_us_publink1000154255

Qualified Recovery Assistance Property(p27)


rule
spacer

Qualified Recovery Assistance Property

You can take a special depreciation allowance for qualified Recovery Assistance property you acquired after May 4, 2007, and placed in service in the Kansas disaster area. The Kansas disaster area is generally located in Kiowa County, Kansas, and surrounding areas. For a complete list of the affected areas, see Pub. 4492-A. Your property is qualified Recovery Assistance property if it meets the following requirements.
  1. It is nonresidential real property or residential rental property.
  2. It is property that meets certain tests (explained next under Other Tests To Be Met).
  3. It is not excepted property (explained under Excepted Property below).
taxmap/pubs/p946-014.htm#en_us_publink1000154256

Other Tests To Be Met(p28)


rule
spacer

To be qualified Recovery Assistance property, the property must also meet all of the following tests.
taxmap/pubs/p946-014.htm#en_us_publink1000154257

Acquisition date test.(p28)


rule
spacer

You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) after May 4, 2007, with no binding written contract for the acquisition in effect before May 5, 2007.
Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after May 4, 2007, and before January 1, 2009. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000154258

Placed in service date test.(p28)


rule
spacer

The property must be placed in service for use in your trade or business before January 1, 2010.
taxmap/pubs/p946-014.htm#en_us_publink1000154259

Sale-leaseback.(p28)


rule
spacer

If you sold qualified Recovery Assistance property you placed in service after May 4, 2007, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before May 5, 2007.
taxmap/pubs/p946-014.htm#en_us_publink1000154260

Syndicated leasing transactions.(p28)


rule
spacer

If qualified Recovery Assistance property is originally placed in service by a lessor after May 4, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between times the first and last units are placed in service does not exceed 12 months.
taxmap/pubs/p946-014.htm#en_us_publink1000154261

Substantial use test.(p28)


rule
spacer

Substantially all (80% or more) of the use of the property must be in the Kansas disaster area and in the active conduct of your trade or business in the Kansas disaster area.
taxmap/pubs/p946-014.htm#en_us_publink1000154262

Original use test.(p28)


rule
spacer

The original use of the property in the Kansas disaster area must have begun with you after May 4, 2007.
Used property can be qualified Recovery Assistance property if it has not previously been used within the Kansas disaster area. Also, additional capital expenditures you incurred after May 4, 2007, to recondition or rebuild your property meet the original use test if the original use of the property in the Kansas disaster area began with you.
If you sold property you placed in service after May 4, 2007, and you leased it back within 3 months after you originally placed the property in service, the lessor is considered to be the original user of the property.
taxmap/pubs/p946-014.htm#en_us_publink1000154263

Excepted Property(p28)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified Recovery Assistance property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000154264

Qualified Reuse and Recycling Property(p28)


rule
spacer

Qualified Reuse and Recycling Property

You can take a special depreciation allowance for qualified reuse and recycling property. Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). Qualified reuse and recycling property also includes software necessary to operate such equipment. The property must meet the following requirements.
taxmap/pubs/p946-014.htm#en_us_publink1000154489

Special Rules(p29)


rule
spacer

previous topic occurrence Special Rules next topic occurrence

taxmap/pubs/p946-014.htm#en_us_publink1000154490

Self-constructed property.(p29)


rule
spacer

Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after August 31, 2008. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000154266

Excepted Property(p29)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified reuse and recycling property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000154267

Qualified Cellulosic Biofuel Plant Property(p29)


rule
spacer

Qualified Cellulosic Biofuel Plant Property

You can take a special depreciation allowance for qualified cellulosic biofuel plant property. Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. Examples include bagasse (from sugar cane), corn stalks, and switchgrass. The property must meet the following requirements.
  1. The property is used in the United States solely to produce cellulosic biofuel.
  2. The original use of the property must begin with you after December 20, 2006.
  3. You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006.
  4. The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 1, 2013.
taxmap/pubs/p946-014.htm#en_us_publink1000154271

Special Rules(p29)


rule
spacer

previous topic occurrence Special Rules next topic occurrence

taxmap/pubs/p946-014.htm#en_us_publink1000154268

Self-constructed property.(p29)


rule
spacer

Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after December 20, 2006. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000154269

Sale-leaseback.(p29)


rule
spacer

If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006.
taxmap/pubs/p946-014.htm#en_us_publink1000154270

Syndicated leasing transactions.(p29)


rule
spacer

If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months.
taxmap/pubs/p946-014.htm#en_us_publink1000154272

Excepted Property(p29)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified cellulosic biofuel plant property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000154273

Qualified Disaster Assistance Property(p30)


rule
spacer

Qualified Disaster Assistance Property

You can take a special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred before January 1, 2010. A list of the federally declared disaster areas is available at the FEMA website at www.fema.gov. Your property is qualified disaster assistance property if it meets the following requirements.
  1. It is one of the following types of property.
    1. Tangible property depreciated under MACRS with a recovery period of 20 years or less.
    2. Water utility property.
    3. Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS.)
    4. Qualified leasehold improvement property (defined under Qualified leasehold improvement property on page 25).
    5. Nonresidential real property and residential rental property.
  2. You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date.
  3. The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster.
  4. The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property.
  5. The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date.
  6. The property is placed in service by you on or before the date which is the last day of the third calendar year following the applicable disaster date (the fourth calendar year in the case of nonresidential real property and residential rental property).
  7. Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring before January 1, 2010.
  8. It is not excepted property (explained later in Excepted Property).
taxmap/pubs/p946-014.htm#en_us_publink1000154274

Special Rules(p30)


rule
spacer

previous topic occurrence Special Rules next topic occurrence

taxmap/pubs/p946-014.htm#en_us_publink1000154275

Self-constructed property.(p30)


rule
spacer

Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after the applicable disaster date. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000154276

Sale-leaseback.(p30)


rule
spacer

If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date.
taxmap/pubs/p946-014.htm#en_us_publink1000154277

Syndicated leasing transactions.(p30)


rule
spacer

If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months.
taxmap/pubs/p946-014.htm#en_us_publink1000154278

Excepted Property(p31)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified disaster assistance property does not include any of the following.
taxmap/pubs/p946-014.htm#en_us_publink1000154279

Certain Qualified Property Acquired After December 31, 2007(p31)


rule
spacer

Certain Qualified Property Acquired After December 31, 2007

You can take a special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. Your property is qualified property if it meets the following requirements.
  1. It is one of the following types of property.
    1. Tangible property depreciated under MACRS with a recovery period of 20 years or less.
    2. Water utility property.
    3. Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS.)
    4. Qualified leasehold improvement property (defined under Qualified leasehold improvement property on page 25).
  2. You must have acquired the property by purchase after December 31, 2007, with no binding written contract for the acquisition of in effect before January 1, 2008.
  3. The property must be placed in service for use in your trade or business or for the production of income before January 1, 2010 (before January 1, 2011, for certain property with a long production period and certain aircraft (defined next)).
  4. The original use of the property must begin with you after December 31, 2007.
  5. It is not excepted property (explained later in Excepted Property).
taxmap/pubs/p946-014.htm#en_us_publink1000154280

Long Production Period Property(p31)


rule
spacer

Long Production Period Property

To be qualified property, long production period property must meet the following requirements.
taxmap/pubs/p946-014.htm#en_us_publink1000154281

Noncommercial Aircraft(p31)


rule
spacer

To be qualified property, noncommercial aircraft must meet the following requirements.
taxmap/pubs/p946-014.htm#en_us_publink1000154287

Special Rules(p32)


rule
spacer

previous topic occurrence Special Rules next topic occurrence

taxmap/pubs/p946-014.htm#en_us_publink1000154288

Self-constructed property.(p32)


rule
spacer

Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after December 31, 2007, and before January 1, 2010. Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into before the manufacture, construction, or production of the property, is considered to be manufactured, constructed, or produced by you.
taxmap/pubs/p946-014.htm#en_us_publink1000154289

Sale-leaseback.(p32)


rule
spacer

If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback.
The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008.
taxmap/pubs/p946-014.htm#en_us_publink1000154290

Syndicated leasing transactions.(p32)


rule
spacer

If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale.
Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months.
taxmap/pubs/p946-014.htm#en_us_publink1000154293

Excepted Property(p32)


rule
spacer

previous topic occurrence Excepted Property next topic occurrence

Qualified property does not include any of the following.