rp-10-47.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.602: Tax Forms and Instructions
(Also: Part I, 179)

Rev. Proc. 2010-47

## SECTION 1. PURPOSE

This revenue procedure modifies Rev. Proc. 2009-50, 2009-2 C.B. 617, as
modified by Rev. Proc. 2010-24, 2010-25 I.R.B. 764, setting out the cost limitations for
expensing property under § 179 of the Internal Revenue Code for taxable years
beginning in 2010. This modification reflects a statutory amendment enacted
subsequent to the publication of Rev. Proc. 2010-24.

## SECTION 2. BACKGROUND

Prior to the enactment of the Small Business Jobs Act of 2010, Pub. L. No.111-
240, 124 Stat. 2504 (2010) (the Small Business Jobs Act) and the Hiring Incentives to
Restore Employment Act of 2010, Pub. L. No. 111-147, 124 Stat. 71 (2010) (the HIRE
Act), § 179(b)(1) prescribed a $125,000 limitation (the $125,000 amount) on the
aggregate cost of § 179 property that could be treated as an expense for taxable years

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beginning after 2006 and before 2011. For those same taxable years, § 179(b)(2)
provided that the $125,000 amount is reduced by the amount by which the cost of § 179
property placed in service during the taxable years exceeds $500,000 (the $500,000
amount). Both the $125,000 amount and the $500,000 amount were adjusted for
inflation annually under § 179(b)(5). For taxable years beginning in 2010, section 3.20
of Rev. Proc. 2009-50 provides that the $125,000 amount and the $500,000 amount,
adjusted for inflation, are $134,000 and $530,000, respectively.

Section 102 of the Economic Stimulus Act of 2008, Pub. L. No. 110-185, 122
Stat. 613 (2008), changed the $125,000 amount and the $500,000 amount to $250,000
and $800,000, respectively, for taxable years beginning in 2008. Section 1202 of the
American Recovery and Reinvestment Tax Act of 2009, Pub. L. No. 111-5, 123 Stat.
115 (2009), extended the $250,000 amount and the $800,000 amount to taxable years
beginning in 2009.

Section 201 of the HIRE Act changed the $125,000 amount and the $500,000
amount to $250,000 and $800,000, respectively, for taxable years beginning in 2010.
To reflect the HIRE Act changes, Rev. Proc. 2010-24 modified section 3.20 of Rev.
Proc. 2009-50 to provide that the $125,000 amount and the $500,000 amount are
$250,000 and $800,000, respectively, for taxable years beginning in 2010.

Subsequently, § 2021 of the Small Business Jobs Act extended and increased
the $250,000 amount and the $800,000 amount to $500,000 and $2,000,000,
respectively, for taxable years beginning in 2010 and 2011.

## SECTION 3. APPLICATION

To reflect the statutory changes made to § 179 by § 2021 of the Small Business

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Jobs Act, section 3.20 of Rev. Proc. 2009-50, as modified by Rev. Proc. 2010-24, is
modified to read as follows:

.20 Election to Expense Certain Depreciable Assets. For taxable years
beginning in 2010, under § 179(b)(1)(B) the aggregate cost of any § 179 property a
taxpayer may elect to treat as an expense cannot exceed $500,000. Under
§ 179(b)(2)(B), the $500,000 limitation is reduced (but not below zero) by the amount by
which the cost of § 179 property placed in service during the 2010 taxable year exceeds
$2,000,000.

## SECTION 4. EFFECT ON OTHER DOCUMENTS

Section 3.20 of Rev. Proc. 2009-50, as modified and superseded by Rev. Proc.
2010-24, is modified and superseded. Rev. Proc. 2010-24 is superseded.

## SECTION 5. EFFECTIVE DATE

This revenue procedure is effective for taxable years beginning in 2010.

## SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Winston H. Douglas of the
Office of Associate Chief Counsel (Income Tax & Accounting). For further information
regarding this revenue procedure contact Winston H. Douglas on (202) 622-4930 (not a
toll free call).