Page:United States Statutes at Large Volume 98 Part 1.djvu/663

 PUBLIC LAW 98-369—JULY 18, 1984 •3 J

98 STAT. (315

«Q) jjj GENERAL.—Start-up expenditures may, at the election of the taxpayer, be treated as deferred expenses. Such deferred expenses shall be allowed as a deduction prorated equally over such period of not less than 60 months as may be selected by the taxpayer (beginning with the month in which the active trade or business begins). "(2) DISPOSITIONS BEFORE CLOSE OF AMORTIZATION PERIOD.—In

any case in which a trade or business is completely disposed of by the taxpayer before the end of the period to which paragraph (1) applies, any deferred expenses attributable to such trade or business which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165. "(c) DEFINITIONS.—For purposes of this section— "(1) START-UP EXPENDITURES.—The term 'start-up expenditure' means any amount— "(A) paid or incurred in connection with— 'O "(i) investigating the creation or acquisition of an active trade or business, or "(ii) creating an active trade or business, or "(iii) any activity engaged in for profit and for the production of income before the day on which the active trade or business begins, in anticipation of such >: activity becoming an active trade or business, and "(B) which, if paid or incurred in connection with the operation of an existing active trade or business (in the same field as the trade or business referred to in subpara>"» graph (A)), would be allowable as a deduction for the taxable year in which paid or incurred. The term 'start-up expenditure' does not include any amount with respect to which a deduction is allowable under section 163(a), 164, or 174. -rj

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"(2) BEGINNING OF TRADE OR BUSINESS.—

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"(A) IN GENERAL.—Except as provided in subparagraph (B), the determination of when an active trade or business begins shall be made in accordance with such regulations as the Secretary may prescribe. "(B) ACQUIRED TRADE OR BUSINESS.—An acquired active trade or business shall be treated as beginning when the taxpayer acquires it.

"(d) ELECTION.— "(1) TIME FOR MAKING ELECTION.—An

election under subsection (b) shall be made not later than the time prescribed by law for filing the return for the taxable year in which the trade or business begins (including extensions thereof). "(2) SCOPE OF ELECTION.—The period selected under subsection (b) shall be adhered to in computing taxable income for the taxable year for which the election is made and all subsequent taxable years." (b) CONFORMING AMENDMENT.—The table of sections for part VI of subchapter B of chapter 1 is amended by striking out the item relating to section 195 and inserting in lieu thereof the following: "Sec. 195. Start-up expenditures."

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after June 30, 1984.

26 USC 195 note.

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