
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC280F]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
                      PART IX--ITEMS NOT DEDUCTIBLE
 
Sec. 280F. Limitation on depreciation for luxury automobiles; 
        limitation where certain property used for personal purposes
        

(a) Limitation on amount of depreciation for luxury automobiles

                          (1) Depreciation

        (A) Limitation

            The amount of the depreciation deduction for any taxable 
        year for any passenger automobile shall not exceed--
                (i) $2,560 for the 1st taxable year in the recovery 
            period,
                (ii) $4,100 for the 2nd taxable year in the recovery 
            period,
                (iii) $2,450 for the 3rd taxable year in the recovery 
            period, and
                (iv) $1,475 for each succeeding taxable year in the 
            recovery period.

        (B) Disallowed deductions allowed for years after recovery 
                period

            (i) In general

                Except as provided in clause (ii), the unrecovered basis 
            of any passenger automobile shall be treated as an expense 
            for the 1st taxable year after the recovery period. Any 
            excess of the unrecovered basis over the limitation of 
            clause (ii) shall be treated as an expense in the succeeding 
            taxable year.
            (ii) $1,475 limitation

                The amount treated as an expense under clause (i) for 
            any taxable year shall not exceed $1,475.
            (iii) Property must be depreciable

                No amount shall be allowable as a deduction by reason of 
            this subparagraph with respect to any property for any 
            taxable year unless a depreciation deduction would be 
            allowable with respect to such property for such taxable 
            year.
            (iv) Amount treated as depreciation deduction

                For purposes of this subtitle, any amount allowable as a 
            deduction by reason of this subparagraph shall be treated as 
            a depreciation deduction allowable under section 168.

        (C) Special rule for certain clean-fuel passenger automobiles

            (i) Modified automobiles

                In the case of a passenger automobile which is propelled 
            by a fuel which is not a clean-burning fuel and to which is 
            installed qualified clean-fuel vehicle property (as defined 
            in section 179A(c)(1)(A)) for purposes of permitting such 
            vehicle to be propelled by a clean burning fuel (as defined 
            in section 179A(e)(1)), subparagraph (A) shall not apply to 
            the cost of the installed qualified clean burning vehicle 
            property.
            (ii) Purpose built passenger vehicles

                In the case of a purpose built passenger vehicle (as 
            defined in section 4001(a)(2)(C)(ii)), each of the annual 
            limitations specified in subparagraphs (A) and (B) shall be 
            tripled.

      (2) Coordination with reductions in amount allowable by 
                        reason of personal use, etc.

        This subsection shall be applied before--
            (A) the application of subsection (b), and
            (B) the application of any other reduction in the amount of 
        any depreciation deduction allowable under section 168 by reason 
        of any use not qualifying the property for such credit or 
        depreciation deduction.

(b) Limitation where business use of listed property not greater than 50 
        percent

                          (1) Depreciation

        If any listed property is not predominantly used in a qualified 
    business use for any taxable year, the deduction allowed under 
    section 168 with respect to such property for such taxable year and 
    any subsequent taxable year shall be determined under section 168(g) 
    (relating to alternative depreciation system).

                            (2) Recapture

        (A) Where business use percentage does not exceed 50 percent

            If--
                (i) property is predominantly used in a qualified 
            business use in a taxable year in which it is placed in 
            service, and
                (ii) such property is not predominantly used in a 
            qualified business use for any subsequent taxable year,

        then any excess depreciation shall be included in gross income 
        for the taxable year referred to in clause (ii), and the 
        depreciation deduction for the taxable year referred to in 
        clause (ii) and any subsequent taxable years shall be determined 
        under section 168(g) (relating to alternative depreciation 
        system).

        (B) Excess depreciation

            For purposes of subparagraph (A), the term ``excess 
        depreciation'' means the excess (if any) of--
                (i) the amount of the depreciation deductions allowable 
            with respect to the property for taxable years before the 
            1st taxable year in which the property was not predominantly 
            used in a qualified business use, over
                (ii) the amount which would have been so allowable if 
            the property had not been predominantly used in a qualified 
            business use for the taxable year in which it was placed in 
            service.

      (3) Property predominantly used in qualified business use

        For purposes of this subsection, property shall be treated as 
    predominantly used in a qualified business use for any taxable year 
    if the business use percentage for such taxable year exceeds 50 
    percent.

(c) Treatment of leases

                (1) Lessor's deductions not affected

        This section shall not apply to any listed property leased or 
    held for leasing by any person regularly engaged in the business of 
    leasing such property.

                   (2) Lessee's deductions reduced

        For purposes of determining the amount allowable as a deduction 
    under this chapter for rentals or other payments under a lease for a 
    period of 30 days or more of listed property, only the allowable 
    percentage of such payments shall be taken into account.

                      (3) Allowable percentage

        For purposes of paragraph (2), the allowable percentage shall be 
    determined under tables prescribed by the Secretary. Such tables 
    shall be prescribed so that the reduction in the deduction under 
    paragraph (2) is substantially equivalent to the applicable 
    restrictions contained in subsections (a) and (b).

                           (4) Lease term

        In determining the term of any lease for purposes of paragraph 
    (2), the rules of section 168(i)(3)(A) shall apply.

                        (5) Lessee recapture

        Under regulations prescribed by the Secretary, rules similar to 
    the rules of subsection (b)(3) shall apply to any lessee to which 
    paragraph (2) applies.

(d) Definitions and special rules

    For purposes of this section--

                  (1) Coordination with section 179

        Any deduction allowable under section 179 with respect to any 
    listed property shall be subject to the limitations of subsections 
    (a) and (b), and the limitation of paragraph (3) of this subsection, 
    in the same manner as if it were a depreciation deduction allowable 
    under section 168.

         (2) Subsequent depreciation deductions reduced for 
                    deductions allocable to personal use

        Solely for purposes of determining the amount of the 
    depreciation deduction for subsequent taxable years, if less than 
    100 percent of the use of any listed property during any taxable 
    year is use in a trade or business (including the holding for the 
    production of income), all of the use of such property during such 
    taxable year shall be treated as use so described.

                     (3) Deductions of employee

        (A) In general

            Any employee use of listed property shall not be treated as 
        use in a trade or business for purposes of determining the 
        amount of any depreciation deduction allowable to the employee 
        (or the amount of any deduction allowable to the employee for 
        rentals or other payments under a lease of listed property) 
        unless such use is for the convenience of the employer and 
        required as a condition of employment.

        (B) Employee use

            For purposes of subparagraph (A), the term ``employee use'' 
        means any use in connection with the performance of services as 
        an employee.

                         (4) Listed property

        (A) In general

            Except as provided in subparagraph (B), the term ``listed 
        property'' means--
                (i) any passenger automobile,
                (ii) any other property used as a means of 
            transportation,
                (iii) any property of a type generally used for purposes 
            of entertainment, recreation, or amusement,
                (iv) any computer or peripheral equipment (as defined in 
            section 168(i)(2)(B)),
                (v) any cellular telephone (or other similar 
            telecommunications equipment), and
                (vi) any other property of a type specified by the 
            Secretary by regulations.

        (B) Exception for certain computers

            The term ``listed property'' shall not include any computer 
        or peripheral equipment (as so defined) used exclusively at a 
        regular business establishment and owned or leased by the person 
        operating such establishment. For purposes of the preceding 
        sentence, any portion of a dwelling unit shall be treated as a 
        regular business establishment if (and only if) the requirements 
        of section 280A(c)(1) are met with respect to such portion.

        (C) Exception for property used in business of transporting 
                persons or property

            Except to the extent provided in regulations, clause (ii) of 
        subparagraph (A) shall not apply to any property substantially 
        all of the use of which is in a trade or business of providing 
        to unrelated persons services consisting of the transportation 
        of persons or property for compensation or hire.

                      (5) Passenger automobile

        (A) In general

            Except as provided in subparagraph (B), the term ``passenger 
        automobile'' means any 4-wheeled vehicle--
                (i) which is manufactured primarily for use on public 
            streets, roads, and highways, and
                (ii) which is rated at 6,000 pounds unloaded gross 
            vehicle weight or less.

        In the case of a truck or van, clause (ii) shall be applied by 
        substituting ``gross vehicle weight'' for ``unloaded gross 
        vehicle weight''.

        (B) Exception for certain vehicles

            The term ``passenger automobile'' shall not include--
                (i) any ambulance, hearse, or combination ambulance-
            hearse used by the taxpayer directly in a trade or business,
                (ii) any vehicle used by the taxpayer directly in the 
            trade or business of transporting persons or property for 
            compensation or hire, and
                (iii) under regulations, any truck or van.

                     (6) Business use percentage

        (A) In general

            The term ``business use percentage'' means the percentage of 
        the use of any listed property during any taxable year which is 
        a qualified business use.

        (B) Qualified business use

            Except as provided in subparagraph (C), the term ``qualified 
        business use'' means any use in a trade or business of the 
        taxpayer.

        (C) Exception for certain use by 5-percent owners and related 
                persons

            (i) In general

                The term ``qualified business use'' shall not include--
                    (I) leasing property to any 5-percent owner or 
                related person,
                    (II) use of property provided as compensation for 
                the performance of services by a 5-percent owner or 
                related person, or
                    (III) use of property provided as compensation for 
                the performance of services by any person not described 
                in subclause (II) unless an amount is included in the 
                gross income of such person with respect to such use, 
                and, where required, there was withholding under chapter 
                24.
            (ii) Special rule for aircraft

                Clause (i) shall not apply with respect to any aircraft 
            if at least 25 percent of the total use of the aircraft 
            during the taxable year consists of qualified business use 
            not described in clause (i).

        (D) Definitions

            For purposes of this paragraph--
            (i) 5-percent owner

                The term ``5-percent owner'' means any person who is a 
            5-percent owner with respect to the taxpayer (as defined in 
            section 416(i)(1)(B)(i)).
            (ii) Related person

                The term ``related person'' means any person related to 
            the taxpayer (within the meaning of section 267(b)).

              (7) Automobile price inflation adjustment

        (A) In general

            In the case of any passenger automobile placed in service 
        after 1988, subsection (a) shall be applied by increasing each 
        dollar amount contained in such subsection by the automobile 
        price inflation adjustment for the calendar year in which such 
        automobile is placed in service. Any increase under the 
        preceding sentence shall be rounded to the nearest multiple of 
        $100 (or if the increase is a multiple of $50, such increase 
        shall be increased to the next higher multiple of $100).

        (B) Automobile price inflation adjustment

            For purposes of this paragraph--
            (i) In general

                The automobile price inflation adjustment for any 
            calendar year is the percentage (if any) by which--
                    (I) the CPI automobile component for October of the 
                preceding calendar year, exceeds
                    (II) the CPI automobile component for October of 
                1987.
            (ii) CPI automobile component

                The term ``CPI automobile component'' means the 
            automobile component of the Consumer Price Index for All 
            Urban Consumers published by the Department of Labor.

                        (8) Unrecovered basis

        For purposes of subsection (a)(2), the term ``unrecovered 
    basis'' means the adjusted basis of the passenger automobile 
    determined after the application of subsection (a) and as if all use 
    during the recovery period were use in a trade or business 
    (including the holding of property for the production of income).

    (9) All taxpayers holding interests in passenger automobile 
                            treated as 1 taxpayer

        All taxpayers holding interests in any passenger automobile 
    shall be treated as 1 taxpayer for purposes of applying subsection 
    (a) to such automobile, and the limitations of subsection (a) shall 
    be allocated among such taxpayers in proportion to their interests 
    in such automobile.

     (10) Special rule for property acquired in nonrecognition 
                                transactions

        For purposes of subsection (a)(2) any property acquired in a 
    nonrecognition transaction shall be treated as a single property 
    originally placed in service in the taxable year in which it was 
    placed in service after being so acquired.

(e) Regulations

    The Secretary shall prescribe such regulations as may be necessary 
or appropriate to carry out the purposes of this section, including 
regulations with respect to items properly included in, or excluded 
from, the adjusted basis of any listed property.

(Added Pub. L. 98-369, div. A, title I, Sec. 179(a), July 18, 1984, 98 
Stat. 713; amended Pub. L. 99-44, Sec. 4, May 24, 1985, 99 Stat. 78; 
Pub. L. 99-514, title II, Sec. 201(d)(4), title XVIII, 
Sec. 1812(e)(1)(A), (C), (2)-(5), Oct. 22, 1986, 100 Stat. 2139, 2836, 
2837; Pub. L. 100-647, title I, Secs. 1002(a)(10), (b)(2), 1018(u)(3), 
Nov. 10, 1988, 102 Stat. 3354, 3357, 3590; Pub. L. 101-239, title VII, 
Sec. 7643(a), Dec. 19, 1989, 103 Stat. 2381; Pub. L. 101-508, title XI, 
Sec. 11813(b)(13)(A)-(E), Nov. 5, 1990, 104 Stat. 1388-554, 1388-555; 
Pub. L. 104-188, title I, Sec. 1702(h)(5), Aug. 20, 1996, 110 Stat. 
1874; Pub. L. 105-34, title IX, Sec. 971(a), Aug. 5, 1997, 111 Stat. 
897; Pub. L. 105-206, title VI, Sec. 6009(c), July 22, 1998, 112 Stat. 
812.)


                               Amendments

    1998--Subsec. (a)(1)(C)(ii). Pub. L. 105-206 substituted 
``subparagraphs (A) and (B)'' for ``subparagraph (A)''.
    1997--Subsec. (a)(1)(C). Pub. L. 105-34 added subpar. (C).
    1996--Subsec. (a). Pub. L. 104-188 struck out ``investment tax 
credit and'' after ``amount of'' in heading.
    1990--Pub. L. 101-508, Sec. 11813(b)(13)(E), struck out ``investment 
tax credit and'' after ``Limitation on'' in section catchline.
    Subsec. (a)(1). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), 
redesignated par. (2) as (1) and struck out former par. (1) ``Investment 
tax credit'' which read as follows: ``The amount of the credit 
determined under section 46(a) for any passenger automobile shall not 
exceed $675.''
    Subsec. (a)(2). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), 
redesignated par. (3) as (2). Former par. (2) redesignated (1).
    Subsec. (a)(2)(B). Pub. L. 101-508, Sec. 11813(b)(13)(A)(ii), struck 
out ``the credit determined under section 46(a) or'' after ``the amount 
of''.
    Subsec. (a)(3). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), 
redesignated par. (3) as (2).
    Subsec. (a)(4). Pub. L. 101-508, Sec. 11813(b)(13)(A)(i), struck out 
par. (4) ``Special rule where election of reduced credit in lieu of the 
basis adjustment'' which read as follows: ``In the case of any election 
under section 48(q)(4) with respect to any passenger automobile, the 
limitation of paragraph (1) applicable to such passenger automobile 
shall be \2/3\ of the amount which would be so applicable but for this 
paragraph.''
    Subsec. (b). Pub. L. 101-508, Sec. 11813(b)(13)(B), redesignated 
pars. (2) to (4) as (1) to (3), respectively, and struck out former par. 
(1) ``Investment tax credit'' which read as follows: ``For purposes of 
this subtitle, any listed property shall not be treated as section 38 
property for any taxable year unless such property is predominantly used 
in a qualified business use for such taxable year.''
    Subsec. (c)(1). Pub. L. 101-508, Sec. 11813(b)(13)(C), struck out 
``credits and'' after ``Lessor's'' in heading.
    Subsec. (d)(3)(A). Pub. L. 101-508, Sec. 11813(b)(13)(D), struck out 
``the amount of any credit allowable under section 38 to the employee 
or'' after ``of determining''.
    1989--Subsec. (d)(4)(A)(v), (vi). Pub. L. 101-239 added cl. (v) and 
redesignated former cl. (v) as (vi).
    1988--Subsec. (b)(3)(B)(i). Pub. L. 100-647, Sec. 1018(u)(3), 
substituted ``depreciation deductions'' for ``recovery deductions''.
    Subsec. (d)(1). Pub. L. 100-647, Sec. 1002(b)(2), substituted 
``subsections (a) and (b), and the limitation of paragraph (3) of this 
subsection,'' for ``subsections (a) and (b)''.
    Subsec. (d)(3)(A). Pub. L. 100-647, Sec. 1002(a)(10), substituted 
``depreciation deduction'' for ``recovery deduction''.
    1986--Subsec. (a)(2)(A). Pub. L. 99-514, Sec. 201(d)(4)(A)(i), (K), 
substituted ``depreciation deduction'' for ``recovery deduction'' in 
introductory provisions and substituted cls. (i) to (iv) for former cls. 
(i) and (ii) which read as follows:
    ``(i) $3,200 for the first taxable year in the recovery period, and
    ``(ii) $4,800 for each succeeding taxable year in the recovery 
period.''
    Subsec. (a)(2)(B). Pub. L. 99-514, Sec. 201(d)(4)(A)(ii), (K), 
substituted ``$1,475'' for ``$4,800'' in heading and text of cl. (ii), 
and ``depreciation deduction'' for ``recovery deduction'' in heading and 
text of cl. (iv).
    Subsec. (a)(3)(B). Pub. L. 99-514, Sec. 201(d)(4)(K), substituted 
``depreciation deduction'' for ``recovery deduction'' in two places.
    Subsec. (b)(2). Pub. L. 99-514, Sec. 201(d)(4)(J), substituted 
``section 168(g) (relating to alternative depreciation system)'' for 
``the straight line method over the earnings and profits life for such 
property''.
    Subsec. (b)(3)(A). Pub. L. 99-514, Sec. 201(d)(4)(B), (K), 
substituted ``depreciation deduction'' for ``recovery deduction'' and 
``section 168(g) (relating to alternative depreciation system)'' for 
``the straight line method over the earnings and profits life'' in 
closing provisions.
    Subsec. (b)(4). Pub. L. 99-514, Sec. 201(d)(4)(C), in amending par. 
(4) generally, struck out heading ``Definitions'', redesignated as par. 
(4) former subpar. (A) heading and text, substituted ``For purposes of 
this section, property'' for ``Property'', and struck out former subpar. 
(B) definition of straight line method over earnings and profits life.
    Subsec. (c)(4). Pub. L. 99-514, Sec. 201(d)(4)(D), substituted 
``section 168(i)(3)(A)'' for ``section 168(j)(6)(B)''.
    Subsec. (d)(1). Pub. L. 99-514, Sec. 201(d)(4)(E), substituted 
``depreciation deduction'' for ``recovery deduction''.
    Subsec. (d)(2). Pub. L. 99-514, Sec. 1812(e)(5), substituted ``is 
use described in'' for ``is not use described in''.
    Pub. L. 99-514, Sec. 201(d)(4)(F), substituted ``depreciation 
deduction'' for ``recovery deduction'' and ``use in a trade or business 
(including the holding for the production of income)'' for ``use 
described in section 168(c)(1) (defining recovery property)''.
    Subsec. (d)(3)(A). Pub. L. 99-514, Sec. 1812(e)(2), inserted ``(or 
the amount of any deduction allowable to the employee for rentals or 
other payments under a lease of listed property)''.
    Subsec. (d)(4)(A)(iv). Pub. L. 99-514, Sec. 201(d)(4)(G), 
substituted ``section 168(i)(2)(B)'' for ``section 168(j)(5)(D)''.
    Subsec. (d)(4)(B). Pub. L. 99-514, Sec. 1812(e)(3), inserted ``and 
owned or leased by the person operating such establishment''.
    Subsec. (d)(4)(C). Pub. L. 99-514, Sec. 1812(e)(4), added subpar. 
(C).
    Subsec. (d)(5)(A). Pub. L. 99-514, Sec. 1812(e)(1)(A), (C), 
substituted ``unloaded gross vehicle weight'' for ``gross vehicle 
weight'' in cl. (ii) and inserted at end ``In the case of a truck or 
van, clause (ii) shall be applied by substituting `gross vehicle weight' 
for `unloaded gross vehicle weight'.''
    Subsec. (d)(8). Pub. L. 99-514, Sec. 201(d)(4)(H), amended par. (8) 
generally. Prior to amendment, par. (8) read as follows: ``For purposes 
of subsection (a)(2), the term ``unrecovered basis'' means the excess 
(if any) of--
        ``(A) the unadjusted basis (as defined in section 168(d)(1)(A)) 
    of the passenger automobile, over
        ``(B) the amount of the recovery deductions which would have 
    been allowable for taxable years in the recovery period determined 
    after the application of subsection (a) and as if all use during the 
    recovery period were use described in section 168(c)(1).''
    Subsec. (d)(10). Pub. L. 99-514, Sec. 201(d)(4)(I), struck out ``, 
notwithstanding any regulations prescribed under section 168(f)(7),'' 
after ``For purposes of subsection (a)(2)''.
    1985--Subsec. (a)(1). Pub. L. 99-44, Sec. 4(a)(1), substituted 
``$675'' for ``$1,000''.
    Subsec. (a)(2)(A)(i). Pub. L. 99-44, Sec. 4(a)(2)(A), substituted 
``$3,200'' for ``$4,000''.
    Subsec. (a)(2)(A)(ii), (B)(ii). Pub. L. 99-44, Sec. 4(a)(2)(B), 
substituted ``$4,800'' for ``$6,000'' wherever appearing in text and 
heading.
    Subsec. (d)(7)(A). Pub. L. 99-44, Sec. 4(b)(1), inserted ``placed in 
service after 1988'' after ``passenger automobile''.
    Subsec. (d)(7)(B)(i). Pub. L. 99-44, Sec. 4(b)(3), struck out last 
sentence which directed that in the case of calendar year 1984, the 
automobile price inflation adjustment would be zero.
    Subsec. (d)(7)(B)(i)(II). Pub. L. 99-44, Sec. 4(b)(2), substituted 
``1987'' for ``1983''.


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-206 effective, except as otherwise 
provided, as if included in the provisions of the Taxpayer Relief Act of 
1997, Pub. L. 105-34, to which such amendment relates, see section 6024 
of Pub. L. 105-206, set out as a note under section 1 of this title.


                    Effective Date of 1997 Amendment

    Section 971(b) of Pub. L. 105-34 provided that: ``The amendments 
made by this section [amending this section] shall apply to property 
placed in service after the date of enactment of this Act [Aug. 5, 1997] 
and before January 1, 2005.''


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-188 effective, except as otherwise 
expressly provided, as if included in the provision of the Revenue 
Reconciliation Act of 1990, Pub. L. 101-508, title XI, to which such 
amendment relates, see section 1702(i) of Pub. L. 104-188, set out as a 
note under section 38 of this title.


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 applicable to property placed in 
service after Dec. 31, 1990, but not applicable to any transition 
property (as defined in section 49(e) of this title), any property with 
respect to which qualified progress expenditures were previously taken 
into account under section 46(d) of this title, and any property 
described in section 46(b)(2)(C) of this title, as such sections were in 
effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101-508, set out 
as a note under section 29 of this title.


                    Effective Date of 1989 Amendment

    Section 7643(b) of Pub. L. 101-239 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to property 
placed in service or leased in taxable years beginning after December 
31, 1989.''


                    Effective Date of 1988 Amendment

    Amendment by Pub. L. 100-647 effective, except as otherwise 
provided, as if included in the provision of the Tax Reform Act of 1986, 
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of 
Pub. L. 100-647, set out as a note under section 1 of this title.


                    Effective Date of 1986 Amendment

    Amendment by section 201(d)(4) of Pub. L. 99-514 applicable to 
property placed in service after Dec. 31, 1986, in taxable years ending 
after such date, with exceptions, see sections 203 and 204 of Pub. L. 
99-514, set out as a note under section 168 of this title.
    Amendment by section 201(d)(4) of Pub. L. 99-514 not applicable to 
any property placed in service before Jan. 1, 1994, if such property 
placed in service as part of specified rehabilitations, and not 
applicable to certain additional rehabilitations, see section 251(d)(2), 
(3) of Pub. L. 99-514, set out as a note under section 46 of this title.
    Amendment by section 1812(e)(1)(A), (C), (2)-(5) of Pub. L. 99-514 
effective, except as otherwise provided, as if included in the 
provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div. A, to 
which such amendment relates, see section 1881 of Pub. L. 99-514, set 
out as a note under section 48 of this title.


                    Effective Date of 1985 Amendment

    Section 6(e) of Pub. L. 99-44 provided that:
    ``(1) Except as provided in paragraph (2), the amendments made by 
section 4 [amending this section] shall apply to--
        ``(A) property placed in service after April 2, 1985, in taxable 
    years ending after such date, and
        ``(B) property leased after April 2, 1985, in taxable years 
    ending after such date.
    ``(2) The amendments made by section 4 [amending this section] shall 
not apply to any property--
        ``(A) acquired by the taxpayer pursuant to a binding contract in 
    effect on April 1, 1985, and at all times thereafter, but only if 
    the property is placed in service before August 1, 1985, or
        ``(B) of which the taxpayer is the lessee, but only if the lease 
    is pursuant to a binding contract in effect on April 1, 1985, and at 
    all times thereafter, and only if the taxpayer first uses such 
    property under the lease before August 1, 1985.''


                             Effective Date

    Section 179(d) of Pub. L. 98-369 provided that:
    ``(1) In general.--
        ``(A) Except as provided in subparagraph (B), the amendments 
    made by subsections (a) and (c) [enacting this section] shall apply 
    to--
            ``(i) property placed in service after June 18, 1984, in 
        taxable years ending after such date, and
            ``(ii) property leased after June 18, 1984, in taxable years 
        ending after such date.
        ``(B) The amendments made by subsections (a) and (c) shall not 
    apply to any property--
            ``(i) acquired by the taxpayer pursuant to a binding 
        contract in effect on June 18, 1984, and at all times thereafter 
        (or under construction on such date) but only if the property is 
        placed in service before January 1, 1985 (January 1, 1987, in 
        the case of 15-year real property), or
            ``(ii) of which the taxpayer is the lessee but only if the 
        lease is pursuant to a binding contract in effect on June 18, 
        1984, and at all times thereafter and only if the taxpayer first 
        uses such property under the lease before January 1, 1985 
        (January 1, 1987, in the case of 15-year real property).
    For purposes of the preceding sentence, the term `15-year real 
    property' includes 18-year real property.
    ``(2) Compliance provisions.--The amendments made by subsection (b) 
[amending sections 274, 6653, and 6695 of this title] shall apply to 
taxable years beginning after December 31, 1984.''


                            Savings Provision

    For provisions that nothing in amendment by Pub. L. 101-508 be 
construed to affect treatment of certain transactions occurring, 
property acquired, or items of income, loss, deduction, or credit taken 
into account prior to Nov. 5, 1990, for purposes of determining 
liability for tax for periods ending after Nov. 5, 1990, see section 
11821(b) of Pub. L. 101-508, set out as a note under section 29 of this 
title.


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 168, 274 of this title.
