Page:United States Statutes at Large Volume 72 Part 1.djvu/1721

 72 S T A T. ]

PUBLIC LAW 85-866-SEPT. 2, 1958

of the net operating loss which is carried to the third preceding taxable year." (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply in respect of net operating losses for taxable years ending after December 31, 1957. SEC. 204. ADDITIONAL FIRST-YEAR DEPRECIATION ALLOWANCE FOR SMALL BUSINESS. (a) IN GENERAL.—Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1954 (relating to itemized deductions for individuals and corporations) is amended by adding after section 178 (as added by section 15 of this Act) the following new section: "SEC. 179. ADDITIONAL FIRST-YEAR DEPRECIATION ALLOWANCE FOR SMALL BUSINESS. " (a) GENERAL RULE.^—In the case of section 179 property, the term 'reasonable allowance' as used in section 167(a) may, at the election of the taxpayer, include an allowance, for the first taxable year for which a deduction is allowable under section 167 to the taxpayer with respect to such property, of 20 percent of the cost of such property. (b) DOLLAR LIMITATION.—If in any one taxable year the cost of section 179 property with respect to which the taxpayer may elect an allowance under subsection (a) for such taxable year exceeds $10,000, then subsection (a) shall apply with respect to those items selected by the taxpayer, but only to the extent of an aggregate cost of $10,000. I n the case of a husband and wife who file a joint return under section 6013 for the taxable year, the limitation under the preceding sentence shall be $20,000 in lieu of $10,000.

1679

26 USC i67.

" (c) ELECTION.—

"(1) IN GENERAL.—The election under this section for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. The election shall be made in such manner as the Secretary or his delegate may by regulations prescribe. "(2) ELECTION IRREVOCABLE.—Any election made under this section may not be revoked except with the consent of the Secretary or his delegate. " (d) DEFINITIONS AND SPECIAL RULES.— "(1) SECTION I 7 9 PROPERTY.—For purposes

of this section, the term 'section 179 property' means tangible personal property— " (A) of a character subject to the allowance for depreciation under section 167, " (B) acquired by purchase after December 31, 1957, for use in a trade or business or for holding for production of income, and " (C) with a useful life (determined at the time of such acquisition) of 6 years or more. " (2) PURCHASE DEFINED.—For purposes of paragraph (1), the

term 'purchase' means any acquisition of property, but only if— '' (A) the property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of losses under section 267 or 707 (b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants), " (B) the property is not acquired by one member of an affiliated group from another member of the same affiliated group, and 98395-59-PT. 1-106

26 USC 267,707.

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