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taxmap/pubs/p946-015.htm#en_us_publink1000142518

Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance(p32)


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Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance

Corporations and certain automotive partnerships can elect for their first tax year ending after March 31, 2008, to accelerate pre-2006 unused research credits or minimum tax credits in lieu of claiming the special depreciation allowance for certain eligible qualified property (as defined in section 168(k)(4)(D) of the Internal Revenue Code) (the "section 168(k)(4) election"). Generally, this election applies to eligible qualified property acquired after March 31, 2008, and placed in service before January 1, 2009 (before January 1, 2010, for long production period property and noncommercial aircraft (defined earlier)).
A section 168(k)(4) election made by a corporation for its first tax year ending after March 31, 2008, continues to apply to extension property (as defined in section 168(k)(4)(H) of the Internal Revenue Code) unless the corporation makes an election not to apply the section 168(k)(4) election to extension property. Generally, extension property is eligible qualified property acquired after March 31, 2008, and placed in service after December 31, 2008, and before January 1, 2010. Long production period property and noncommercial aircraft are extension property if acquired after March 31, 2008, and placed in service after December 31, 2009, and before January 1, 2011. If a corporation did not make a section 168(k)(4) election for its first tax year ending after March 31, 2008, the corporation can elect for its first take year ending after December 31, 2008, to claim pre-2006 unused research credits or minimum tax credits in lieu of claiming the special depreciation allowance for only extension property. A section 168(k)(4) election made by a certain automotive partnership does not apply to extension property.
If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. See Which Depreciation Method Applies in chapter 4.
Once made, the election cannot be revoked without IRS consent.
taxmap/pubs/p946-015.htm#en_us_publink1000142519

Additional guidance.(p32)


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For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. Proc. 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www.irs.gov/pub/irs-irbs/irb08-44.pdf, Rev. Proc. 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www.irs.gov/pub/irs-irbs/irb09-06.pdf, and Rev. Proc. 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www.irs.gov/pub/irs-irbs/irb09-29.pdf. Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions.
Additional guidance may also be available in later Internal Revenue Bulletins available at www.irs.gov/irb.