rp-15-48.pdf

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26 CFR 1.168(k)-1: Additional first year depreciation.
(Also Part 1, § 179.)

Rev. Proc. 2015-48

SECTION 1. PURPOSE
This revenue procedure provides guidance for issues related to the enactment of
§ 125(a), § 125(c)(2), and § 127(d) of the Tax Increase Prevention Act of 2014, Pub. L.
No. 113-295, 128 Stat. 4010 (December 19, 2014) (TIPA). Section 125(a) of the TIPA
amended § 168(k)(2) of the Internal Revenue Code (Code) by extending the placed-in-
service date for property to qualify for the 50-percent additional first year depreciation
deduction. Section 125(c)(2) of the TIPA amended § 168(k)(4) by allowing corporations
to elect not to claim the 50-percent additional first year depreciation deduction for
certain property placed in service generally after December 31, 2013, and before
January 1, 2015, and instead to increase their alternative minimum tax (AMT) credit
limitation under § 53(c). Section 127(d) of the TIPA amended § 179(f) by extending the
application of § 179(f) from any taxable year beginning after 2009 and before 2014 to
any taxable year beginning after 2009 and before 2015.
SECTION 2. BACKGROUND
.01 Extension of 50-Percent Additional First Year Depreciation Deduction.
(1) Prior to amendment by the TIPA, § 168(k)(1) allowed a 50-percent
additional first year depreciation deduction for qualified property acquired by a taxpayer

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after 2007 and placed in service by the taxpayer before 2014 (before 2015 in the case
of property described in § 168(k)(2)(B) and (C)). Section 125(a) of the TIPA amended
§ 168(k)(2) by extending the placed-in-service date to before 2015 (before 2016 in the
case of property described in § 168(k)(2)(B) and (C)), and extending other dates in
§ 168(k)(2) by changing “2014” to “2015” or “January 1, 2014” to “January 1, 2015” (for
example, the self-constructed property rules in § 168(k)(2)(E)(i)).
(2) Section 168(k)(2)(D)(iii) provides that a taxpayer may elect not to deduct
additional first year depreciation for any class of property placed in service by the
taxpayer during the taxable year. The term “class of property” is defined in § 1.168(k)-
1(e)(2)(i) of the Income Tax Regulations to mean, in general, each class of property
described in § 168(e) (for example, 5-year property). If the taxpayer makes this
election, it applies to all qualified property that is in the same class and placed in service
in the same taxable year.
(3) Section 1.168(k)-1(e)(3)(i) provides that the election not to deduct additional
first year depreciation must be made by the due date, including extensions, of the
federal tax return for the taxable year in which the taxpayer places the property in
service. Section 1.168(k)-1(e)(3)(ii) provides that this election generally must be made
in the manner prescribed on Form 4562, Depreciation and Amortization, and its
instructions. The instructions to Form 4562 for the 2013 and 2014 taxable years
provide that the election is made by attaching a statement to the taxpayer’s timely filed
tax return indicating that the taxpayer is electing not to deduct the additional first year
depreciation and the class of property for which the taxpayer is making the election.

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Section 1.168(k)-1(e)(7)(i) provides that once the election is made, it generally may be
revoked only with the written consent of the Commissioner of Internal Revenue.
(4) Taxpayers with a taxable year beginning in 2013 and ending in 2014 that
filed their 2013 federal tax returns before the enactment of the TIPA may be uncertain
how to claim the 50-percent additional first year depreciation for qualified property
placed in service after December 31, 2013, in taxable years ending in 2014. Section 3
of this revenue procedure provides the procedures for claiming or not claiming the 50-
percent additional first year depreciation for this property.
.02 TIPA Amendment of § 168(k)(4).
(1) Prior to amendment by the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312, 124 Stat. 3296
(December 17, 2010) (TRUIRJCA), § 168(k)(4) allowed a corporation or an S
corporation to elect not to claim the additional first year depreciation deduction
allowable under § 168(k) for eligible qualified property or extension property and instead
increase the business credit limitation under § 38(c) and the AMT credit limitation under
§ 53(c). As a result, a corporation or S corporation was able to claim unused credits
from taxable years beginning before January 1, 2006, that were allocable to research
expenditures or AMT liabilities, and accelerate such credits as refundable credits. With
the exception of revised dates, eligible qualified property or extension property is
property eligible for the additional first year depreciation deduction under § 168(k)(1).
(2) Section 401(c) of TRUIRJCA amended § 168(k)(4) by adding § 168(k)(4)(I)
to the Code. Section 168(k)(4)(I) applied to property placed in service generally after
2010 and before 2013 (round 2 extension property). Section 331(c) of the American

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Taxpayer Relief Act of 2012, Pub. L. No. 112-240, 126 Stat. 2313 (January 2, 2013)
(ATRA), amended § 168(k)(4) by adding § 168(k)(4)(J) to the Code. Section
168(k)(4)(J) applied to property placed in service generally after 2012 and before 2014
(round 3 extension property). With the exception of revised dates, round 2 extension
property or round 3 extension property is property eligible for the additional first year
depreciation deduction under § 168(k)(1). Pursuant to § 168(k)(4)(I)(i) and (J)(i),
§ 168(k)(4) increased only the AMT credit limitation under § 53(c) for round 2 extension
property and round 3 extension property. As a result, § 168(k)(4) allowed a corporation
or an S corporation to elect not to claim the additional first year depreciation deduction
allowable under § 168(k) for round 2 extension property and round 3 extension property
and instead increase the AMT credit limitation under § 53(c). Accordingly, a corporation
or S corporation was able to claim unused credits from taxable years beginning before
January 1, 2006, that were allocable to AMT liabilities and accelerate such credits as
refundable credits.
(3) With the extension of the additional first year depreciation deduction by
§ 125(a) of the TIPA, § 168(k)(4) is correspondingly extended to apply to “round 4
extension property.” Section 125(c)(2) of the TIPA amended § 168(k)(4) by adding
§ 168(k)(4)(K) to the Code. Section 168(k)(4)(K)(iii) defines the term “round 4 extension
property” as meaning property that is eligible qualified property solely by reason of the
extension of § 168(k)(2) by the TIPA. Section 4.01 of this revenue procedure clarifies
which eligible qualified property is round 4 extension property.
(4) Pursuant to § 168(k)(4)(K)(i)(I), § 168(k)(4) increases only the AMT credit
limitation under § 53(c) for round 4 extension property. As a result, § 168(k)(4) allows a

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corporation or an S corporation to elect not to claim the additional first year depreciation
deduction allowable under § 168(k) for round 4 extension property and instead increase
the AMT credit limitation under § 53(c). Accordingly, a corporation or S corporation is
able to claim unused credits from taxable years beginning before January 1, 2006, that
are allocable to AMT liabilities and accelerate such credits as refundable credits.
(5) Section 168(k)(4)(K)(ii)(I) provides that if a corporation has an election in
effect under § 168(k)(4) for round 3 extension property and the corporation does not
make the election not to apply § 168(k)(4) to round 4 extension property, the corporation
is treated as having an election in effect for round 4 extension property. Section 4.02 of
this revenue procedure provides guidance regarding the time and manner for making an
election not to apply § 168(k)(4) to round 4 extension property.
(6) Section 168(k)(4)(K)(ii)(II) provides that if a corporation does not have an
election in effect under § 168(k)(4) for round 3 extension property, the corporation may
elect to apply § 168(k)(4) to round 4 extension property. Section 4.03 of this revenue
procedure provides guidance regarding the time and manner for making this election.
.03 Extension of Application of § 179(f).
(1) Section 179(a) allows a taxpayer to elect to treat the cost (or a portion of the
cost) of any § 179 property as an expense for the taxable year in which the taxpayer
places the property in service. Section 179(b)(1) and section 179(b)(2) prescribe a
dollar limitation on the aggregate cost of § 179 property that can be treated as an
expense under § 179(a). The dollar limitation is the amount under § 179(b)(1) (the
§ 179(b)(1) limitation), reduced (but not below zero) by the amount by which the cost of
§ 179 property placed in service during the taxable year exceeds the amount under

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§ 179(b)(2) (the § 179(b)(2) limitation). Prior to amendment by the TIPA, the
§ 179(b)(1) limitation was $500,000 for taxable years beginning in 2010, 2011, 2012, or
2013, and $25,000 for taxable years beginning after 2013. The § 179(b)(2) limitation
was $2,000,000 for taxable years beginning in 2010, 2011, 2012, or 2013, and
$200,000 for taxable years beginning after 2013. Section 127(a) of the TIPA extended
the $500,000 § 179(b)(1) limitation to taxable years beginning after 2009 and before
2015 and the $2,000,000 § 179(b)(2) limitation to taxable years beginning after 2009
and before 2015.
(2) Section 179(b)(3)(A) provides that a taxpayer’s § 179 deduction for any
taxable year, after application of the § 179(b)(1) and (2) limitations, is limited to the
taxpayer’s taxable income for that taxable year that is derived from the taxpayer’s active
conduct of any trade or business during that taxable year (taxable income limitation).
Section 179(b)(3)(B) provides that the amount of any cost of § 179 property elected to
be expensed in a taxable year that is disallowed as a § 179 deduction under the taxable
income limitation may be carried forward for an unlimited number of years and may be
deducted under § 179(a) in a future year subject to the same limitations.
(3) If a taxpayer elects to apply § 179(f), § 179 property includes qualified real
property (as defined in § 179(f)(1) and(2)). Prior to amendment by the TIPA, § 179(f)
applied to qualified real property placed in service in any taxable year beginning in
2010, 2011, 2012, or 2013. Section 127(d)(1) of the TIPA extended the application of
§ 179(f) to qualified real property placed in service in any taxable year beginning after
2009 and before 2015.

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(4) For purposes of applying the § 179(b)(1) limitation ($500,000) for any
taxable year beginning after 2009 and before 2015, § 179(f)(3) provides that not more
than $250,000 of the aggregate cost (as defined in § 179(d)(3) and § 1.179-4(d)) of
§ 179 property that is treated as an expense under § 179(a) for the taxable year can be
attributable to qualified real property. Thus, the maximum amount of qualified real
property that may be expensed under § 179(a) for any taxable year beginning after
2009 and before 2015 is $250,000.
(5) Prior to amendment by the TIPA, § 179(f)(4) provided that, notwithstanding
§ 179(b)(3)(B), a taxpayer that elected to apply § 179(f) and elected to expense under
§ 179(a) the cost (or a portion of the cost) of qualified real property placed in service
during any taxable year beginning in 2010, 2011, 2012, or 2013 could not carryover to
any taxable year beginning after 2013 the amount of any cost of such property that was
disallowed as a § 179 deduction under the taxable income limitation of § 179(b)(3)(A)
(2010, 2011, 2012, or 2013 disallowed § 179 deduction). To the extent that any § 179
deduction attributable to qualified real property was not allowed to be carried over to a
taxable year beginning after 2013, that amount was required to be treated as an amount
for which an election under § 179 was not made and as property placed in service on
the first day of the taxpayer’s last taxable year beginning in 2013 for purposes of
computing depreciation. Section 127(d)(2) of the TIPA amended § 179(f)(4) by striking
“2013” each place it appeared and inserting “2014”.
(6) The Treasury Department and the Internal Revenue Service recognize that
a taxpayer that treated the amount of a 2010, 2011, 2012, or 2013 disallowed § 179
deduction for qualified real property as property placed in service on the first day of the

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taxpayer’s last taxable year beginning in 2013 may want to carryover that amount to any
taxable year beginning in 2014 in accordance with § 179(f)(4), as amended by the TIPA.
Section 5 of this revenue procedure provides the procedures to do this.
SECTION 3. TIPA RETROACTIVE APPLICATION OF 50-PERCENT ADDITIONAL
FIRST YEAR DEPRECIATION DEDUCTION
.01 Scope. This section 3 applies to a taxpayer that did not claim the 50-percent
additional first year depreciation for some or all qualified property placed in service by
the taxpayer after December 31, 2013, on its federal tax return for its taxable year
beginning in 2013 and ending in 2014 (2013 taxable year) or its taxable year of less
than 12 months beginning and ending in 2014 (2014 short taxable year). For purposes
of this section 3:
(1) The term “qualified property” has the same meaning as that term is defined
in § 168(k)(2), as amended by the TIPA;
(2) The term “2013 qualified property” means qualified property placed in
service by the taxpayer before January 1, 2014, in its 2013 taxable year; and
(3) The term “2014 qualified property” means qualified property placed in
service by the taxpayer after December 31, 2013, in its 2013 taxable year or 2014 short
taxable year, as applicable.
.02 No Election Made To Not Deduct 50-Percent Additional First Year
Depreciation. If, on its timely filed federal tax return for the 2013 taxable year or the
2014 short taxable year (both as defined in section 3.01 of this revenue procedure), as
applicable, a taxpayer did not deduct the 50-percent additional first year depreciation for
a class of property that is qualified property or for some or all of its 2014 qualified

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property, and did not make an election within the time and in the manner described in
either section 2.01(3) or section 3.04(2) of this revenue procedure not to deduct the 50-
percent additional first year depreciation deduction for the class of property in which the
qualified property or the 2014 qualified property, as applicable, is included, the taxpayer
may claim the 50-percent additional first year depreciation for that class by filing either:
(1) An amended federal tax return for the 2013 taxable year or the 2014 short
taxable year, as applicable, before the taxpayer files its federal tax return for the first
taxable year succeeding the 2013 taxable year or the 2014 short taxable year, as
applicable. If the taxpayer has both a 2013 taxable year and a 2014 short taxable year,
and has timely filed federal tax returns for both such years, the amended federal tax
returns for both the 2013 taxable year and the 2014 short taxable year must be filed
before the taxpayer files its federal tax return for the first taxable year succeeding the
2014 short taxable year; or
(2) A Form 3115, Application for Change in Accounting Method, under section
6.01 of Rev. Proc. 2015-14, 2015-5 I.R.B. 450, 459, with the taxpayer’s timely filed
federal tax return for the first or second taxable year succeeding the 2013 taxable year
or the 2014 short taxable year, as applicable, if the taxpayer owns the property as of the
first day of the year of change (as defined in section 3.19 of Rev. Proc. 2015-13, 2015-5
I.R.B. 419, 429). If the taxpayer has both a 2013 taxable year and a 2014 short taxable
year, and has timely filed federal tax returns for both such years, the Form 3115 must
be filed with the taxpayer’s timely filed federal tax return for the first or second taxable
year succeeding the 2014 short taxable year if the taxpayer owns the property as of the
first day of the year of change.

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.03 Consent Granted to Revoke Election to Not Deduct 50-Percent Additional
First Year Depreciation. If, on its timely filed federal tax return for the 2013 taxable year
or the 2014 short taxable year, as applicable, a taxpayer made an election within the
time and in the manner described in section 2.01(3) of this revenue procedure to not
deduct the 50-percent additional first year depreciation for a class of property that is
qualified property, the Commissioner grants the taxpayer consent to revoke that
election, provided the taxpayer files an amended federal tax return for the 2013 taxable
year or the 2014 short taxable year, as applicable, in a manner that is consistent with
the revocation of the election and by the later of (1) December 4, 2015, or (2) before the
taxpayer files its federal tax return for the first taxable year succeeding the 2013 taxable
year or the 2014 short taxable year.
.04 Election To Not Deduct 50-Percent Additional First Year Depreciation.
(1) In general. A taxpayer that timely filed its federal tax return for the 2013
taxable year or the 2014 short taxable year, as applicable, has made the election to not
deduct the 50-percent additional first year depreciation for a class of property that is
qualified property if the taxpayer made the election within the time and in the manner
provided in section 2.01(3) of this revenue procedure and did not revoke that election
within the time and in the manner provided in section 3.03 of this revenue procedure.
(2) Deemed election. If section 3.04(1) of this revenue procedure does not
apply, a taxpayer that timely filed its federal tax return for the 2013 taxable year or the
2014 short taxable year, as applicable, will be treated as making the election to not
deduct the 50-percent additional first year depreciation for a class of property that is
qualified property if the taxpayer:

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(a) On that return, did not deduct the 50-percent additional first year
depreciation for that class of property but did deduct depreciation; and
(b) Does not file an amended federal tax return or a Form 3115 within the time
and in the manner provided in section 3.02 or section 3.03 of this revenue procedure, as
applicable, to claim the 50-percent additional first year depreciation for the class of
property.
(3) Application. If the taxpayer makes the election under section 3.04(1) or (2)
of this revenue procedure for its 2013 taxable year, the election applies to both 2013
qualified property and 2014 qualified property in the same class of property for which
the election is made. If the taxpayer makes the election under section 3.04(1) or (2) of
this revenue procedure for its 2014 short taxable year, the election applies to 2014
qualified property in the same class of property for which the election is made.
SECTION 4. ROUND 4 EXTENSION PROPERTY
.01 Definition of Round 4 Extension Property.
(1) In general. Under § 168(k)(4)(K)(iii), round 4 extension property means
property that is eligible qualified property solely by reason of the extension of
§ 168(k)(2) by the TIPA. Pursuant to § 168(k)(4)(D), as amended by the TIPA, the term
“eligible qualified property” means qualified property under § 168(k)(2), except that in
applying § 168(k)(2), (1) “March 31, 2008” is substituted for “December 31, 2007” each
place it appears in § 168(k)(2)(A) and § 168(k)(2)(E)(i) and (ii), (2) “April 1, 2008” is
substituted for “January 1, 2008” in § 168(k)(2)(A)(iii)(I), and (3) only adjusted basis
attributable to manufacture, construction, or production after March 31, 2008, and
before January 1, 2010, and after December 31, 2010, and before January 1, 2015, is

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taken into account under § 168(k)(2)(B)(ii). However, the binding contract requirement
in § 168(k)(2)(A)(iii)(I) does not apply for determining whether a passenger aircraft is
eligible qualified property. Section 168(k)(4)(G)(iii). See section 3 of Rev. Proc. 2008-
65, 2008-2 C.B. 1082 (as modified by section 7.01 of Rev. Proc. 2009-33, 2009-29
I.R.B. 150) and section 3.02 of Rev. Proc. 2009-33 for additional guidance on the
definition of eligible qualified property that is not extension property for purposes of
§ 168(k)(4).
(2) Round 4 extension property defined. Round 4 extension property is eligible
qualified property (as defined in § 168(k)(4)(D), as amended by the TIPA) that:
(a) Is acquired by the taxpayer after March 31, 2008, is placed in service by
the taxpayer after December 31, 2013, and before January 1, 2015, and is not
described in § 168(k)(2)(B) (long-production period property or transportation property)
or § 168(k)(2)(C) (certain aircraft) that is placed in service by the taxpayer after
December 31, 2013, and before January 1, 2015;
(b) Meets the requirements of § 168(k)(2)(B) (long production period property
or transportation property), is acquired by the taxpayer after March 31, 2008, and is
placed in service by the taxpayer after December 31, 2014, and before January 1, 2016;
or
(c) Meets the requirements of § 168(k)(2)(C) (certain aircraft), is acquired by
the taxpayer after March 31, 2008, and is placed in service by the taxpayer after
December 31, 2014, and before January 1, 2016.
.02 Election Not to Apply § 168(k)(4) to Round 4 Extension Property.

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(1) In general. If a corporate taxpayer has an election in effect under
§ 168(k)(4) for round 3 extension property (as defined in § 168(k)(4)(J)(iv)), the taxpayer
may make an election not to apply § 168(k)(4) to round 4 extension property placed in
service by the taxpayer in its first taxable year ending after December 31, 2013, and in
any subsequent taxable year. Even if the taxpayer does not place in service any round
4 extension property in its first taxable year ending after December 31, 2013, the
taxpayer must make the election not to apply § 168(k)(4) to round 4 extension property
for that taxable year if the taxpayer wishes to apply such election to round 4 extension
property placed in service in a subsequent taxable year. Failure to comply with all of
the applicable requirements of section 4.02(2) of this revenue procedure will nullify a
taxpayer’s attempted election not to apply § 168(k)(4) to round 4 extension property.
(2) Time and Manner for Making the Election Not to Apply § 168(k)(4) to Round
4 Extension Property.
(a) In general. A corporate taxpayer that timely files its federal income tax
return for its first taxable year ending after December 31, 2013, makes the election not
to apply § 168(k)(4) to round 4 extension property by applying the election procedures
in section 4.02 or 4.03 of Rev. Proc. 2009-33, as applicable, or by meeting the deemed
election requirements in section 4.02(b) or (c) of this revenue procedure, as applicable.
If the taxpayer has timely filed such federal income tax return and did not make the
election not to apply § 168(k)(4) to round 4 extension property but wants to do so, see
section 4.04 of Rev. Proc. 2009-33 for how to make a late election. In applying section
4.02, 4.03, or 4.04 of Rev. Proc. 2009-33, as applicable, the taxpayer should make the
following substitutions:

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(i) “round 4 extension property” is substituted for “extension property”;
(ii) “December 31, 2013” is substituted for “December 31, 2008”; and
(iii) “The TIPA” is substituted for “The Act”.
(b) Deemed election for taxpayers that are not members of a controlled group
of corporations. This section 4.02(2)(b) applies to a corporate taxpayer that is not a
member of a controlled group of corporations (as defined in § 168(k)(4)(C)(iv) and in
section 2.05 of Rev. Proc. 2009-16, 2009-6 I.R.B. 449). If that taxpayer timely filed its
original federal income tax return for its first taxable year ending after December 31,
2013, on or before December 4, 2015, the taxpayer will be treated as making the
election not to apply § 168(k)(4) to round 4 extension property if the taxpayer:
(i) Filed, with its original federal income tax return for the taxpayer’s first
taxable year ending after December 31, 2013, the Form 4562, Depreciation and
Amortization (Including Information on Listed Property), indicating that the taxpayer: (A)
claimed the additional first year depreciation deduction for all round 4 extension
property placed in service by the taxpayer during that taxable year (unless the taxpayer
made the election under § 168(k)(2)(D)(iii) for the class of property in which the round 4
extension property is included); and (B) used the applicable depreciation method for
such property under § 168(b) (unless the taxpayer elected the alternative depreciation
system under § 168(g)(7) for the class of property in which the round 4 extension
property is included); and
(ii) Provides written notification, if notification has not previously been
provided, to any partnership in which the taxpayer is a partner that the taxpayer is

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making the election not to apply § 168(k)(4) to round 4 extension property. This
notification must be made to the applicable partnership(s) by December 4, 2015.
(c) Deemed election for taxpayers that are members of a controlled group of
corporations.
(i) In general. If any member of a controlled group of corporations
(hereinafter such group is referred to as a “controlled group”) is treated as making the
election not to apply § 168(k)(4) to round 4 extension property under section
4.02(2)(c)(ii) or (iii) of this revenue procedure, such election is binding on all other
members of the controlled group. See section 4.03(1) of Rev. Proc. 2009-33.
(ii) All members of a controlled group constitute a single consolidated
group. This section 4.02(2)(c)(ii) applies when all members of a controlled group are
members of a consolidated group. If the common parent (within the meaning of
§ 1.1502-77(a)(1)(i)) of the consolidated group timely filed the original consolidated
federal income tax return for its first taxable year ending after December 31, 2013, on or
before December 4, 2015, all members of the consolidated group will be treated as
making an election not to apply § 168(k)(4) to all round 4 extension property if the
common parent complies with the procedures in section 4.02(2)(b) of this revenue
procedure for all members of the consolidated group (for example, the written
notification required in section 4.02(2)(b)(ii) of this revenue procedure is provided to all
partnerships in which any member is a partner).
(iii) All members of a controlled group do not constitute a single
consolidated group. This section 4.02(2)(c)(ii) applies when separate federal income
tax returns are filed by some or all members of a controlled group. If a controlled group

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includes, but is not limited to, members of a consolidated group, the consolidated group
is treated as a single member of the controlled group. If a member of the controlled
group timely filed its original federal income tax return for its first taxable year ending
after December 31, 2013, on or before December 4, 2015, such member will be treated
as making the election not to apply § 168(k)(4) to all round 4 extension property if the
member:
(A) Complies with the procedures in section 4.02(2)(b) of this revenue
procedure; and
(B) Provides written notification, if notification has not previously been
provided, to all other members of the controlled group that the election not to apply
§ 168(k)(4) to round 4 extension property will be made. This notification must be made
to the other members by December 4, 2015.
.03 Section 168(k)(4) Round 4 Extension Property Election.
(1) In general. If a corporate taxpayer does not have an election in effect
under § 168(k)(4) for round 3 extension property (as defined in § 168(k)(4)(J)(iv)), the
taxpayer may make an election to apply § 168(k)(4) to round 4 extension property
(§ 168(k)(4) round 4 extension property election). If the § 168(k)(4) round 4 extension
property election is made, the election applies to all round 4 extension property placed
in service by the taxpayer in its first taxable year ending after December 31, 2013, and
in any subsequent taxable year. Even if the taxpayer does not place in service any
round 4 extension property in its first taxable year ending after December 31, 2013, the
taxpayer must make the § 168(k)(4) round 4 extension property election for that taxable
year if the taxpayer wishes to apply the election to round 4 extension property placed in

17

service in a subsequent taxable year. Failure to comply with all of the applicable
requirements of section 4.03(2) of this revenue procedure will nullify a taxpayer’s
attempted § 168(k)(4) round 4 extension property election.
(2) Time and Manner for Making the § 168(k)(4) Round 4 Extension Property
Election.
(a) In general. A corporate taxpayer that timely files its federal income tax
return for its first taxable year ending after December 31, 2013, makes the § 168(k)(4)
round 4 extension property election by applying the election procedures in section 6.02,
6.03, or 6.04 of Rev. Proc. 2009-33, as applicable, or by meeting the deemed election
requirements in section 4.03(b) or (c) of this revenue procedure, as applicable. If the
taxpayer has timely filed such federal income tax return and did not make the
§ 168(k)(4) round 4 extension property election but wants to do so, see section 6.06 of
Rev. Proc. 2009-33 for how to make a late election. In applying section 6.02, 6.03,
6.04, or 6.06 of Rev. Proc. 2009-33, as applicable, the taxpayer should make the
following substitutions:
(i) “round 4 extension property” is substituted for “extension property”;
(ii) “§ 168(k)(4) round 4 extension property election “ is substituted for
“§ 168(k)(4) extension property election”;
(iii) “December 31, 2013” is substituted for “December 31, 2008”;
(iii) “2014” is substituted for “2008”;
(iv) In section 6.02(2)(a)(i), strike the language “(for example, Line 32g of
the 2008 Form 1120)” and replace with the following: “(for example, Line 32 of the 2014
Form 1120)”;

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(v) Strike the language in section 6.02(2)(a)(ii) and replace with the
following: “Filing, with the Form 1120, the Form 8827, Credit for Prior Year Minimum
Tax – Corporations, for the taxpayer’s first taxable year ending after December 31,
2013;”;
(vi) Strike the word “Stimulus” in sections 6.02(2)(a)(iii) and 6.02(2)(b)(iii);
(vii) Strike the language in section 6.02(2)(b)(ii) and replace with the
following: “Attaching to the Form 1120S for the taxpayer’s first taxable year ending after
December 31, 2013, a statement indicating that the taxpayer is making the § 168(k)(4)
round 4 extension property election and a statement showing the computation of the
increase to the AMT credit limitation under § 53(c) resulting from making the § 168(k)(4)
round 4 extension property election;”;
(viii) In section 6.03, strike the language “If a corporate taxpayer did not
make the § 168(k)(4) election for its first taxable year ending March 31, 2008, and the
taxpayer” and replace with the following: “If a corporate taxpayer”;
(ix) In section 6.04(2)(c)(iv), strike the language “(excluding extensions)”
and replace with the following: “(including extensions)”; and
(x) “December 31, 2014” is substituted for “December 31, 2009”.
(b) Deemed election for taxpayers that are not members of a controlled
group. This section 4.03(2)(b) applies to a corporate taxpayer that is not a member of a
controlled group (as defined in § 168(k)(4)(C)(iv) and in section 2.05 of Rev. Proc. 2009-
16). If that taxpayer timely filed its original federal income tax return for its first taxable
year ending after December 31, 2013, on or before December 4, 2015, the taxpayer will
be treated as making the § 168(k)(4) round 4 extension property election if:

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(i) In the case of a C corporation, the taxpayer claimed the refundable credit
on the appropriate line of the original Form 1120, U.S. Corporation Income Tax Return,
for its first taxable year ending after December 31, 2013 (for example, Line 32 of the
2014 Form 1120);
(ii) In the case of a S corporation, the taxpayer made appropriate
adjustments to the appropriate line of the original Form 1120S, U.S. Income Tax Return
for an S Corporation, for the taxpayer’s first taxable year ending after December 31,
2013, to reflect the results described in section 6.05(3) of Rev. Proc. 2009-33 from
making the § 168(k)(4) round 4 extension property election (for example, Line 22b of the
2014 Form 1120S). In applying section 6.05(3) of Rev. Proc. 2009-33, the taxpayer
should substitute “§ 168(k)(4) round 4 extension property election” for “§ 168(k)(4)
extension property election”;
(iii) The taxpayer filed, with the original Form 1120 or Form 1120S, as
applicable, for the taxpayer’s first taxable year ending after December 31, 2013, the
Form 4562 indicating that the taxpayer used the straight line method of depreciation
under § 168(b)(3) and did not claim the additional first year depreciation deduction for
all round 4 extension property placed in service during that taxable year; and
(iv) The taxpayer provides written notification, if notification has not
previously been provided, to any partnership in which the taxpayer is a partner that the
taxpayer is making the § 168(k)(4) round 4 extension property election. This notification
must be made to the applicable partnership(s) by December 4, 2015.
(c) Deemed election for taxpayers that are members of a controlled group.

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(i) In general. If any member of a controlled group is treated as making the
§ 168(k)(4) round 4 extension property election under section 4.03(2)(c)(ii) or (iii) of this
revenue procedure, such election is binding on all other members of the controlled
group. See section 4.03(1) of Rev. Proc. 2009-33.
(ii) All members of a controlled group constitute a single consolidated
group. This section 4.03(2)(c)(ii) applies when all members of a controlled group are
members of a consolidated group. If the common parent (within the meaning of
§ 1.1502-77(a)(1)(i)) of the consolidated group timely filed the original consolidated
federal income tax return for its first taxable year ending after December 31, 2013, on or
before December 4, 2015, all members of the consolidated group will be treated as
making the § 168(k)(4) round 4 extension property election if the common parent
complies with the procedures in section 4.03(2)(b) of this revenue procedure for all
members of the consolidated group (for example, the written notification required in
section 4.03(2)(b)(iv) of this revenue procedure is provided to all partnerships in which
any member is a partner).
(iii) All members of a controlled group do not constitute a single
consolidated group. This section 4.03(2)(c)(iii) applies when separate federal income
tax returns are filed by some or all members of a controlled group. If a controlled group
includes, but is not limited to, members of a consolidated group, the consolidated group
is treated as a single member of the controlled group. If a member of the controlled
group timely filed its original federal income tax return for its first taxable year ending
after December 31, 2013, on or before December 4, 2015, such member will be treated
as making the § 168(k)(4) round 4 extension property election if the member:

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(A) Complies with the procedures in section 4.03(2)(b) of this revenue
procedure; and
(B) Provides written notification, if notification has not previously been
provided, to all other members of the controlled group that the § 168(k)(4) round 4
extension property election will be made. This notification must be made to the other
members by December 4, 2015.
SECTION 5. CARRYOVER OF 2010, 2011, 2012, OR 2013 DISALLOWED § 179
DEDUCTION FOR QUALIFIED REAL PROPERTY
.01 In General. A taxpayer that treated the amount of a 2010, 2011, 2012, or
2013 disallowed § 179 deduction for qualified real property as property placed in service
on the first day of the taxpayer’s last taxable year beginning in 2013 may either (1)
continue that treatment, or (2) if the period of limitations for assessment under § 6501(a)
is open, amend its federal tax return for the last taxable year beginning in 2013 to
carryover the 2010, 2011, 2012, or 2013 disallowed § 179 deduction to any taxable year
beginning in 2014. However, if the taxpayer’s last taxable year beginning in 2013 is
open under the period of limitations for assessment under § 6501(a) and an affected
succeeding taxable year is closed under the period of limitations for assessment under
§ 6501(a), the taxpayer must continue to treat the amount of a 2010, 2011, 2012, or
2013 disallowed § 179 deduction as property placed in service on the first day of the
taxpayer’s last taxable year beginning in 2013.
.02 Time and Manner of Filing Amended Federal Tax Return. The amended
federal tax return for the taxpayer’s last taxable year beginning in 2013 must include
any collateral adjustments to taxable income or the tax liability (for example, the amount

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of depreciation allowed or allowable in the last taxable year beginning in 2013 for the
amount of the 2010, 2011, 2012, or 2013 disallowed § 179 deduction). Such collateral
adjustments must also be made on amended federal tax returns for any affected
succeeding taxable years. The amended returns for the taxpayer’s last taxable year
beginning in 2013 and for any affected succeeding taxable years must be filed within
the time prescribed by law for filing an amended return for such taxable years.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective September 15, 2015.
SECTION 7. DRAFTING INFORMATION
The principal author of this revenue procedure is Douglas H. Kim of the Office of
Associate Chief Counsel (Income Tax & Accounting). For further information regarding
this revenue procedure, contact Mr. Kim at (202) 317-7005 (not a toll-free call).