Page:United States Statutes at Large Volume 100 Part 3.djvu/335

 PUBLIC LAW 99-514—OCT. 22, 1986 "(2) REDUCTION IN LIMITATION.—The graph (1) for any taxable year shall be zero) by the amount by which the cost placed in service during such taxable

100 STAT. 2143

limitation under parareduced (but not below of section 179 property year exceeds $200,000.

"(3) LIMITATION BASED ON INCOME FROM TRADE OR BUSINESS.—

"(A) IN GENERAL.—The aggregate cost of section 179 property taken into account under subsection (a) for any taxable year 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. "(B) CARRYOVER OF UNUSED COST.—The amount of any cost which (but for subparagraph (A)) would have been allowed as a deduction under subsection (a) for any taxable year shall be carried to the succeeding taxable year and added to the amount allowable as a deduction under subsection (a) for such succeeding taxable year. "(C) COMPUTATION OF TAXABLE INCOME.—For purposes of

this paragraph, taxable income derived from the conduct of a trade or business shall be computed without regard to the cost of any section 179 property. "(4) MARRIED INDIVIDUALS FIUNG SEPARATELY.—In the case of a husband and wife filing separate returns for the taxable year— "(A) such individuals shall be treated as 1 tgixpayer for purposes of paragraphs (1) and (2), and "(B) unless such individuals elect otherwise, 50 percent of the cost which may be taken into account under subsection (a) for such taxable year (before application of paragraph (3)) shall be allocated to each such individual." (b) SECTION 179 PROPERTY.—Paragraph (1) of section 179(d) (defining section 179 property) is amended by inserting "in the active conduct o f after "purchase for use". (c) RECAPTURE.—Section 179(d)(10) (relating to recapture in certain cases) is amended by striking out all that follows "at any time" and inserting in lieu thereof a period. SEC. 203. EFFECTIVE DATES; GENERAL TRANSITIONAL RULES. (a) GENERAL EFFECTIVE DATES.— (1) SECTION 201.—

(A) IN GENERAL.—Except as provided in this section, section 204, and section 251(d), the amendments made by section 201 shall apply to property placed in service after December 31, 1986, in taxable years ending after such date. (B) ELECTION TO HAVE AMENDMENTS MADE BY SECTION 201

APPLY.—A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have the amendments made by section 201 apply to any property placed in service after July 31, 1986, and before January 1, 1987. (2) SECTION 202.—The amendments made by section 202 shall apply to property placed in service after December 31, 1986, in taxable years ending after such date. (b) GENERAL TRANSITIONAL RULE.—

(1) IN GENERAL.—The amendments made by section 201 shall not apply to—

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