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Ez40 7. Ez40   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. Ez40 Costs not included. Ez40 Intangible Drilling Costs Exploration CostsPartnerships and S corporations. Ez40 Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. Ez40 Film and Television Production Costs What's New Film and television productions costs. Ez40  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. Ez40 See Film and Television Production Costs , later. Ez40 Introduction This chapter discusses costs you can elect to deduct or capitalize. Ez40 You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. Ez40 If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. Ez40 When you capitalize a cost, you add it to the basis of property to which it relates. Ez40 A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. Ez40 Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. Ez40 You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. Ez40 For more information on the alternative minimum tax, see the instructions for the following forms. Ez40 Form 6251, Alternative Minimum Tax—Individuals. Ez40 Form 4626, Alternative Minimum Tax—Corporations. Ez40 Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. Ez40 Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. Ez40 Certain carrying charges must be capitalized under the uniform capitalization rules. Ez40 (For information on capitalization of interest, see chapter 4 . Ez40 ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. Ez40 You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. Ez40 For unimproved and unproductive real property, your election is good for only 1 year. Ez40 You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. Ez40 For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. Ez40 For personal property, your election is effective until the date you install or first use it, whichever is later. Ez40 How to make the election. Ez40   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. Ez40 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Attach the statement to the amended return and write “Filed pursuant to section 301. Ez40 9100-2” on the statement. Ez40 File the amended return at the same address you filed the original return. Ez40 Research and Experimental Costs The costs of research and experimentation are generally capital expenses. Ez40 However, you can elect to deduct these costs as a current business expense. Ez40 Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. Ez40 If you meet certain requirements, you may elect to defer and amortize research and experimental costs. Ez40 For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. Ez40 Research and experimental costs defined. Ez40   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. Ez40 Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. Ez40 Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. Ez40      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. Ez40 However, costs paid or incurred to obtain another's patent are not research and experimental costs. Ez40 Product. Ez40   The term “product” includes any of the following items. Ez40 Formula. Ez40 Invention. Ez40 Patent. Ez40 Pilot model. Ez40 Process. Ez40 Technique. Ez40 Property similar to the items listed above. Ez40 It also includes products used by you in your trade or business or held for sale, lease, or license. Ez40 Costs not included. Ez40   Research and experimental costs do not include expenses for any of the following activities. Ez40 Advertising or promotions. Ez40 Consumer surveys. Ez40 Efficiency surveys. Ez40 Management studies. Ez40 Quality control testing. Ez40 Research in connection with literary, historical, or similar projects. Ez40 The acquisition of another's patent, model, production, or process. Ez40 When and how to elect. Ez40   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. Ez40 If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. Ez40 Deducting or Amortizing Research and Experimentation Costs IF you . Ez40 . Ez40 . Ez40 THEN . Ez40 . Ez40 . Ez40 Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. Ez40 Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. Ez40 See Research and Experimental Costs in chapter 8. Ez40 Research credit. Ez40   If you pay or incur qualified research expenses, you may be able to take the research credit. Ez40 For more information see Form 6765, Credit for Increasing Research Activities and its instructions. Ez40 Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. Ez40 You can usually recover them through depreciation or depletion. Ez40 However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. Ez40 These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. Ez40 You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. Ez40 You can elect to deduct only the costs of items with no salvage value. Ez40 These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. Ez40 Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. Ez40 However, see Amounts paid to contractor that must be capitalized , later. Ez40 You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. Ez40 It does not matter whether there is any intent to produce hydrocarbons. Ez40 If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. Ez40 Amounts paid to contractor that must be capitalized. Ez40   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. Ez40 How to make the election. Ez40   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. Ez40 No formal statement is required. Ez40 If you file Schedule C (Form 1040), enter these costs under “Other expenses. Ez40 ”   For oil and gas wells, your election is binding for the year it is made and for all later years. Ez40 For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. Ez40 You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. Ez40 Energy credit for costs of geothermal wells. Ez40   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. Ez40 See the Instructions for Form 3468 for more information. Ez40 Nonproductive well. Ez40   If you capitalize your IDCs, you have another option if the well is nonproductive. Ez40 You can deduct the IDCs of the nonproductive well as an ordinary loss. Ez40 You must indicate and clearly state your election on your tax return for the year the well is completed. Ez40 Once made, the election for oil and gas wells is binding for all later years. Ez40 You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. Ez40 Costs incurred outside the United States. Ez40   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. Ez40 However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. Ez40 If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. Ez40 These rules do not apply to a nonproductive well. Ez40 Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. Ez40 You recover these costs through depletion as the mineral is removed from the ground. Ez40 However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). Ez40 How to make the election. Ez40   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. Ez40 Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. Ez40 The election applies to the tax year you make this election and all later tax years. Ez40 Partnerships and S corporations. Ez40   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. Ez40 Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. Ez40 Reduced corporate deductions for exploration costs. Ez40   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. Ez40 It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. Ez40 A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. Ez40 For more information on this method of amortization, see Internal Revenue Code section 59(e). Ez40   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. Ez40 However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. Ez40 See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. Ez40   These rules also apply to the deduction of development costs by corporations. Ez40 See Development Costs , later. Ez40 Recapture of exploration expenses. Ez40   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. Ez40 Use either of the following methods. Ez40 Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. Ez40 Your election must be clearly indicated on the return. Ez40 Increase your adjusted basis in the mine by the amount included in income. Ez40 Generally, you must elect this recapture method by the due date (including extensions) of your return. Ez40 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Make the election on your amended return and write “Filed pursuant to section 301. Ez40 9100-2” on the form where you are including the income. Ez40 File the amended return at the same address you filed the original return. Ez40 Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Ez40   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. Ez40 Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. Ez40   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. Ez40 Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. Ez40 If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. Ez40 Foreign exploration costs. Ez40   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. Ez40 You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. Ez40 (Cost depletion is discussed in chapter 9 . Ez40 ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. Ez40 These rules also apply to foreign development costs. Ez40 Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. Ez40 These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. Ez40 Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. Ez40 Development costs do not include the costs for the acquisition or improvement of depreciable property. Ez40 Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. Ez40 This election applies each tax year to expenses paid or incurred in that year. Ez40 Once made, the election is binding for the year and cannot be revoked for any reason. Ez40 How to make the election. Ez40   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. Ez40 Generally, you must make the election by the due date of the return (including extensions). Ez40 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Ez40 9100-2. Ez40 ” File the amended return at the same address you filed the original return. Ez40 Foreign development costs. Ez40   The rules discussed earlier for foreign exploration costs apply to foreign development costs. Ez40 Reduced corporate deductions for development costs. Ez40   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. Ez40 Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. Ez40 For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. Ez40 Circulation costs are deductible even if they normally would be capitalized. Ez40 This rule does not apply to the following costs that must be capitalized. Ez40 The purchase of land or depreciable property. Ez40 The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. Ez40 Other treatment of circulation costs. Ez40   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. Ez40 Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). Ez40 Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. Ez40 How to make the election. Ez40   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. Ez40 Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. Ez40 Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. Ez40 However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. Ez40 The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Ez40 Any remaining costs must be amortized. Ez40 For information about amortizing start-up and organizational costs, see chapter 8 . Ez40 Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. Ez40 Organizational costs include the costs of creating a corporation. Ez40 For more information on start-up and organizational costs, see chapter 8 . Ez40 How to make the election. Ez40   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. Ez40 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Ez40 9100-2. Ez40 ” File the amended return at the same address you filed the original return. Ez40 The election applies when computing taxable income for the current tax year and all subsequent years. Ez40 Reforestation Costs Reforestation costs are generally capital expenditures. Ez40 However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. Ez40 The remaining costs can be amortized over an 84-month period. Ez40 For information about amortizing reforestation costs, see chapter 8 . Ez40 Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Ez40 Qualified timber property is property that contains trees in significant commercial quantities. Ez40 See chapter 8 for more information on qualifying reforestation costs and qualified timber property. Ez40 If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. Ez40 Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. Ez40 How to make the election. Ez40   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. Ez40 If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. Ez40 If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. Ez40 The unique stand identification numbers. Ez40 The total number of acres reforested during the tax year. Ez40 The nature of the reforestation treatments. Ez40 The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. Ez40   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Ez40 9100-2. Ez40 ” File the amended return at the same address you filed the original return. Ez40 The election applies when computing taxable income for the current tax year and all subsequent years. Ez40   For additional information on reforestation costs, see chapter 8 . Ez40 Recapture. Ez40   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. Ez40 For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. Ez40 Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. Ez40 However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. Ez40 Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. Ez40 However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. Ez40 You must own or lease the facility or vehicle for use in connection with your trade or business. Ez40 A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. Ez40 A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). Ez40 You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. Ez40 Deduction limit. Ez40   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. Ez40 However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. Ez40 Partners and partnerships. Ez40   The $15,000 limit applies to a partnership and also to each partner in the partnership. Ez40 A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. Ez40 If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. Ez40   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). Ez40 If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. Ez40 Example. Ez40 Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. Ez40 Emilio had $12,000 of similar expenses in his sole proprietorship. Ez40 He elected to deduct $7,000 of them. Ez40 Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. Ez40 Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. Ez40 Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. Ez40 Qualification standards. Ez40   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. Ez40 You can view the Americans with Disabilities Act at www. Ez40 ada. Ez40 gov/pubs/ada. Ez40 htm. Ez40   The following is a list of some architectural barrier removal costs that can be deducted. Ez40 Ground and floor surfaces. Ez40 Walks. Ez40 Parking lots. Ez40 Ramps. Ez40 Entrances. Ez40 Doors and doorways. Ez40 Stairs. Ez40 Floors. Ez40 Toilet rooms. Ez40 Water fountains. Ez40 Public telephones. Ez40 Elevators. Ez40 Controls. Ez40 Signage. Ez40 Alarms. Ez40 Protruding objects. Ez40 Symbols of accessibility. Ez40 You can find the ADA guidelines and requirements for architectural barrier removal at www. Ez40 usdoj. Ez40 gov/crt/ada/reg3a. Ez40 html. Ez40   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. Ez40 You can find the guidelines and requirements for transportation barrier removal at www. Ez40 fta. Ez40 dot. Ez40 gov. Ez40   Also, you can access the ADA website at www. Ez40 ada. Ez40 gov for additional information. Ez40 Other barrier removals. Ez40   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. Ez40 The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. Ez40 The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). Ez40 The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. Ez40 How to make the election. Ez40   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. Ez40 Identify the deduction as a separate item. Ez40 The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. Ez40 If you make this election, you must maintain adequate records to support your deduction. Ez40   For your election to be valid, you generally must file your return by its due date, including extensions. Ez40 However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). Ez40 Clearly indicate the election on your amended return and write “Filed pursuant to section 301. Ez40 9100-2. Ez40 ” File the amended return at the same address you filed the original return. Ez40 Your election is irrevocable after the due date, including extensions, of your return. Ez40 Disabled access credit. Ez40   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. Ez40 If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. Ez40   For more information, see Form 8826, Disabled Access Credit. Ez40 Film and Television Production Costs Film and television production costs are generally capital expenses. Ez40 However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. Ez40 For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. Ez40 Prev  Up  Next   Home   More Online Publications
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Know the Risks

Cyber security, phishing, worms, firewalls, Trojan horses, hackers, and viruses seem to be in the news every day. Plus warnings to update your virus protection, watch out for online scams, protect your privacy, and watch what you click on are everywhere. But what does it all mean? And what can you do to safeguard access to your computer and to protect yourself and your family? What is this all about?

The first step in protecting yourself is to recognize the risks and become familiar with some of the terminology associated with cyber security. The Department of Homeland Security created this list of terms: Hacker, attacker, or intruder - These terms are applied to the people who seek to exploit weaknesses in software and computer systems for their own gain. Although their intentions are sometimes fairly benign and motivated solely by curiosity, their actions are typically in violation of the intended use of the systems they are exploiting. The results can range from mere mischief (creating a virus with no intentionally negative impact) to malicious (stealing or altering information).

Malicious code includes code such as viruses, worms, and Trojan horses. Although some people use these terms interchangeably, they have unique characteristics:

  • Viruses - This type of malicious code requires you to actually do something before it infects your computer. This action could be opening an email attachment or going to a particular web page.
  • Worms - Worms propagate without you r doing anything. They typically start by exploiting a software vulnerability (a flaw that allows the software's intended security policy to be violated). Then once the victim computer has been infected, the worm will attempt to find and infect other computers. Similar to viruses, worms can propagate via email, web sites, or network-based software. The automated self-propagation of worms distinguishes them from viruses.
  • Trojan horses - A Trojan horse program is software that claims to do one thing while, in fact, doing something different behind the scenes. For example, a program that claims it will speed up your computer may actually be sending your confidential information to an intruder.
  • Spyware - This sneaky software rides its way onto computers when you download screensavers, games, music, and other applications. Spyware sends information about what you're doing on the Internet to a third-party, usually to target you with pop-up ads. Browsers enable you to block pop-ups. You can also install anti-spyware to stop this threat to your privacy.

Minimize Access to Your Information

It is probably easy for you to identify people who could gain physical access to your computer—family members, roommates, co-workers, members of a cleaning crew, and maybe some others. But identifying the people who could gain remote access to your computer becomes much more difficult. As long as you have a computer and connect it to a network or the internet, you are vulnerable to someone or something else accessing or corrupting your information. Luckily, you can develop habits that make it more difficult.

Lock or log-off your computer when you are away from it. This prevents another person from waiting for you to leave and then sitting down at your computer and accessing all of your information.

To be really secure, disconnect your computer from the Internet when you aren't using it. DSL and cable modems make it possible for users to be online all the time, but this convenience comes with risks. The likelihood that attackers or viruses scanning the network for available computers will target your computer becomes much higher if your computer is always connected.

Evaluate your security settings. It is important to examine your computer's settings, especially the security settings, and select options that meet your needs without putting you at increased risk. Many, but not all Internet providers offer free security software. If you don't receive free software, you should consider buying a commercial product that includes virus scan, firewall, and pop-up blockers. You should also be aware of your Internet cookies setting. Cookies are short pieces of data used by web servers to identify users. Some cookies are useful for storing images and data from websites that you frequent, but others are malicious and collect information about you. You'll have to decide how much risk from cookies you can accept. Finally, if you install a patch or a new version of software, or if you hear of something that might affect your settings, reevaluate your settings to make sure they are still appropriate.

Look for a privacy policy statement or seal that indicates the site abides by privacy standards. Take time to read how your privacy is protected.

Look for signals that you are using a secure web page. A secure site encrypts or scrambles personal information so it cannot be easily intercepted. Signals include a screen notice that says you are on a secure site, a closed lock or unbroken key in the bottom corner of your screen, or the first letters of the Internet address you are viewing changes from "http" to "https."

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What if Your Online Privacy is Compromised?

If you believe you might have revealed sensitive information about your organization, report it to the appropriate people within the organization, including network administrators. They can be alert for any suspicious or unusual activity.

If you believe your financial accounts may be compromised, contact your financial institution immediately and close any accounts that may have been compromised. Watch for any unexplainable charges to your account.

Check your credit reports for unusual activity.

Report your situation to local police, and file a report with the Federal Trade Commission.

Protecting Children Online

The Children's Online Privacy Protection Act requires commercial websites to obtain parental consent before collecting, using, or disclosing personal information from children under 13. For more information, contact the FTC about Children's Privacy.

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The Ez40

Ez40 Internal Revenue Bulletin:  2009-17  April 27, 2009  Rev. Ez40 Proc. Ez40 2009-24 Table of Contents SECTION 1. Ez40 PURPOSE SECTION 2. Ez40 BACKGROUND SECTION 3. Ez40 SCOPE SECTION 4. Ez40 APPLICATION. Ez40 01 In General. Ez40 . Ez40 02 Limitations on Depreciation Deductions for Certain Automobiles. Ez40 . Ez40 03 Inclusions in Income of Lessees of Passenger Automobiles. Ez40 SECTION 5. Ez40 EFFECTIVE DATE SECTION 6. Ez40 DRAFTING INFORMATION SECTION 1. Ez40 PURPOSE . Ez40 01 This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2009, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2009, including a separate table of inclusion amounts for lessees of trucks and vans. Ez40 . Ez40 02 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. Ez40 SECTION 2. Ez40 BACKGROUND . Ez40 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year that the passenger automobile is placed in service by the taxpayer and each succeeding year. Ez40 Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. Ez40 The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Ez40 This change reflects the higher rate of price inflation that trucks and vans have been subject to since 1988. Ez40 . Ez40 02 Section 168(k)(1)(A) provides a 50 percent additional first year depreciation deduction for certain new property acquired by a taxpayer after December 31, 2007, and before January 1, 2010, if no written binding contract for the acquisition of the property existed before January 1, 2008. Ez40 Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A) by $8,000 for passenger automobiles to which the 50 percent additional first year depreciation deduction applies. Ez40 . Ez40 03 Section 168(k)(2)(D)(i) provides that the 50 percent additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Ez40 Section 168(k)(2)(D)(iii) permits a taxpayer to elect to not claim the 50 percent additional first year depreciation deduction for any class of property. Ez40 Section 168(k)(4) permits a corporation to elect to not claim the 50 percent additional first year depreciation deduction for all eligible qualified property (that is extension property or that is not extension property, as applicable) and instead to increase the business credit limitation under § 38(c) or the alternative minimum tax credit limitation under § 53(c). Ez40 Accordingly, this revenue procedure provides tables for passenger automobiles for which the 50 percent additional depreciation deduction applies and tables for passenger automobiles for which the 50 percent additional first year depreciation deduction does not apply, including passenger automobiles in a class of property for which the taxpayer “elects out” of the 50 percent additional first year depreciation deduction or passenger automobiles that are eligible qualified property to which the § 168(k)(4) election applies. Ez40 . Ez40 04 For leased passenger automobiles, § 280F(c) requires a reduction in the deduction allowed to the lessee of the passenger automobile. Ez40 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Ez40 Under § 1. Ez40 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. Ez40 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Ez40 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Ez40 SECTION 3. Ez40 SCOPE . Ez40 01 The limitations on depreciation deductions in section 4. Ez40 02(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2009, and continue to apply for each taxable year that the passenger automobile remains in service. Ez40 . Ez40 02 The tables in section 4. Ez40 03 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2009. Ez40 Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Ez40 See Rev. Ez40 Proc. Ez40 2002-14, 2002-1 C. Ez40 B. Ez40 450, for passenger automobiles first leased before January 1, 2003, Rev. Ez40 Proc. Ez40 2003-75, 2003-2 C. Ez40 B. Ez40 1018, for passenger automobiles first leased during calendar year 2003, Rev. Ez40 Proc. Ez40 2004-20, 2004-1 C. Ez40 B. Ez40 642, for passenger automobiles first leased during calendar year 2004, Rev. Ez40 Proc. Ez40 2005-13, 2005-1 C. Ez40 B. Ez40 759, for passenger automobiles first leased during calendar year 2005, Rev. Ez40 Proc. Ez40 2006-18, 2006-1 C. Ez40 B. Ez40 645, for passenger automobiles first leased during calendar year 2006, Rev. Ez40 Proc. Ez40 2007-30, 2007-1 C. Ez40 B. Ez40 1104, for passenger automobiles first leased during calendar year 2007, and Rev. Ez40 Proc. Ez40 2008-22, 2008-12 I. Ez40 R. Ez40 B. Ez40 658, for passenger automobiles first leased during calendar year 2008. Ez40 SECTION 4. Ez40 APPLICATION . Ez40 01 In General. Ez40 (1) Limitations on depreciation deductions for certain automobiles. Ez40 The limitations on depreciation deductions for passenger automobiles placed in service by the taxpayer for the first time during calendar year 2009 are in Tables 1 through 4 in section 4. Ez40 02(2) of this revenue procedure. Ez40 (2) Inclusions in income of lessees of passenger automobiles. Ez40 A taxpayer first leasing a passenger automobile during calendar year 2009 must determine the inclusion amount that is added to gross income using Tables 5 and 6 in section 4. Ez40 03 of this revenue procedure. Ez40 In addition, the taxpayer must follow the procedures of § 1. Ez40 280F-7(a). Ez40 . Ez40 02 Limitations on Depreciation Deductions for Certain Automobiles. Ez40 (1) Amount of the inflation adjustment. Ez40 (a) Passenger automobiles (other than trucks or vans). Ez40 Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Ez40 The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Ez40 The new car component of the CPI was 115. Ez40 2 for October 1987 and 134. Ez40 837 for October 2008. Ez40 The October 2008 index exceeded the October 1987 index by 19. Ez40 637. Ez40 The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2009 for passenger automobiles (other than trucks and vans) is 17. Ez40 05 percent (19. Ez40 637/115. Ez40 2 x 100%). Ez40 This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2009. Ez40 The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. Ez40 1705, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2009. Ez40 (b) Trucks and vans. Ez40 To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2009, the new truck component of the CPI is used instead of the new car component. Ez40 The new truck component of the CPI was 112. Ez40 4 for October 1987 and 133. Ez40 640 for October 2008. Ez40 The October 2008 index exceeded the October 1987 index by 21. Ez40 24. Ez40 The Service has, therefore, determined that the automobile price inflation adjustment for 2009 for trucks and vans is 18. Ez40 90 percent (21. Ez40 24/112. Ez40 4 x 100%). Ez40 This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2009. Ez40 The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0. Ez40 1890, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to trucks and vans. Ez40 (2) Amount of the limitation. Ez40 For passenger automobiles placed in service by the taxpayer in calendar year 2009, Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year. Ez40 Use Table 1 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a passenger automobile (other than a truck or van) in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a passenger automobile that is eligible qualified property to which the § 168(k)(4) election applies. Ez40 Use Table 2 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. Ez40 Use Table 3 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a truck or van in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a truck or van that is eligible qualified property to which the § 168(k)(4) election applies. Ez40 Use Table 4 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. Ez40 REV. Ez40 PROC. Ez40 2009-24 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $2,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. Ez40 PROC. Ez40 2009-24 TABLE 2 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $10,960 2nd Tax Year $4,800 3rd Tax Year $2,850 Each Succeeding Year $1,775 REV. Ez40 PROC. Ez40 2009-24 TABLE 3 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 REV. Ez40 PROC. Ez40 2009-24 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,060 2nd Tax Year $4,900 3rd Tax Year $2,950 Each Succeeding Year $1,775 . Ez40 03 Inclusions in Income of Lessees of Passenger Automobiles. Ez40 The inclusion amounts for passenger automobiles first leased in calendar year 2009 are calculated under the procedures described in § 1. Ez40 280F-7(a). Ez40 Lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 6 of this revenue procedure. Ez40 REV. Ez40 PROC. Ez40 2009-24 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 9 19 28 34 38 19,000 19,500 10 21 32 38 43 19,500 20,000 11 24 36 42 48 20,000 20,500 12 27 39 46 54 20,500 21,000 13 29 43 51 58 21,000 21,500 15 31 47 55 64 21,500 22,000 16 34 50 60 68 22,000 23,000 17 38 56 66 76 23,000 24,000 20 42 64 75 86 24,000 25,000 22 47 71 84 96 25,000 26,000 24 52 78 93 107 26,000 27,000 26 58 85 101 117 27,000 28,000 29 62 93 110 127 28,000 29,000 31 67 100 119 138 29,000 30,000 33 72 108 128 147 30,000 31,000 35 77 115 137 157 31,000 32,000 38 82 122 146 167 32,000 33,000 40 87 129 155 178 33,000 34,000 42 92 137 163 188 34,000 35,000 44 97 144 172 199 35,000 36,000 47 102 151 181 208 36,000 37,000 49 107 159 189 219 37,000 38,000 51 112 166 199 228 38,000 39,000 53 117 173 208 239 39,000 40,000 56 122 180 216 250 40,000 41,000 58 127 188 225 259 41,000 42,000 60 132 195 234 269 42,000 43,000 62 137 203 242 280 43,000 44,000 65 141 210 252 290 44,000 45,000 67 146 218 260 300 45,000 46,000 69 151 225 269 311 46,000 47,000 71 157 232 278 320 47,000 48,000 74 161 240 286 331 48,000 49,000 76 166 247 296 340 49,000 50,000 78 171 255 304 351 50,000 51,000 80 176 262 313 361 51,000 52,000 83 181 269 322 371 52,000 53,000 85 186 276 331 381 53,000 54,000 87 191 284 339 392 54,000 55,000 89 196 291 349 401 55,000 56,000 92 201 298 357 412 56,000 57,000 94 206 306 365 423 57,000 58,000 96 211 313 375 432 58,000 59,000 98 216 320 384 442 59,000 60,000 101 221 327 393 452 60,000 62,000 104 228 339 406 467 62,000 64,000 109 238 353 424 488 64,000 66,000 113 248 368 441 509 66,000 68,000 118 258 382 459 529 68,000 70,000 122 268 397 476 550 70,000 72,000 127 277 413 493 570 72,000 74,000 131 288 427 511 590 74,000 76,000 136 297 442 529 610 76,000 78,000 140 307 457 546 631 78,000 80,000 145 317 471 564 651 80,000 85,000 152 335 497 595 686 85,000 90,000 164 359 534 639 737 90,000 95,000 175 384 570 683 789 95,000 100,000 186 409 607 727 839 100,000 110,000 203 446 662 793 916 110,000 120,000 226 495 736 881 1,018 120,000 130,000 248 545 809 970 1,119 130,000 140,000 271 594 883 1,058 1,220 140,000 150,000 293 644 956 1,146 1,322 150,000 160,000 316 693 1,030 1,234 1,424 160,000 170,000 338 743 1,103 1,322 1,526 170,000 180,000 361 792 1,177 1,410 1,628 180,000 190,000 383 842 1,250 1,498 1,730 190,000 200,000 406 891 1,324 1,586 1,831 200,000 210,000 428 941 1,397 1,675 1,932 210,000 220,000 451 990 1,471 1,762 2,035 220,000 230,000 473 1,040 1,544 1,851 2,136 230,000 240,000 496 1,089 1,618 1,939 2,238 240,000 And up 518 1,139 1,691 2,027 2,340 REV. Ez40 PROC. Ez40 2009-24 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009 Fair Market Value of Electric Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th and Later $18,500 $19,000 8 17 25 30 35 19,000 19,500 9 19 29 35 40 19,500 20,000 10 22 33 38 45 20,000 20,500 11 25 36 43 50 20,500 21,000 12 27 40 48 55 21,000 21,500 13 30 43 52 60 21,500 22,000 15 32 47 56 66 22,000 23,000 16 36 52 64 72 23,000 24,000 18 41 60 72 83 24,000 25,000 21 45 68 81 93 25,000 26,000 23 50 75 90 103 26,000 27,000 25 56 82 98 114 27,000 28,000 27 61 89 107 124 28,000 29,000 30 65 97 116 134 29,000 30,000 32 70 104 125 144 30,000 31,000 34 75 112 134 154 31,000 32,000 36 80 119 143 164 32,000 33,000 39 85 126 151 175 33,000 34,000 41 90 134 160 184 34,000 35,000 43 95 141 169 195 35,000 36,000 45 100 148 178 205 36,000 37,000 48 105 155 187 215 37,000 38,000 50 110 163 195 226 38,000 39,000 52 115 170 204 236 39,000 40,000 55 120 177 213 246 40,000 41,000 57 125 185 221 256 41,000 42,000 59 130 192 231 266 42,000 43,000 61 135 199 240 276 43,000 44,000 64 139 207 249 286 44,000 45,000 66 144 215 257 296 45,000 46,000 68 149 222 266 307 46,000 47,000 70 155 229 274 317 47,000 48,000 73 159 237 283 327 48,000 49,000 75 164 244 292 338 49,000 50,000 77 169 251 301 348 50,000 51,000 79 174 259 310 357 51,000 52,000 82 179 266 318 368 52,000 53,000 84 184 273 328 378 53,000 54,000 86 189 281 336 388 54,000 55,000 88 194 288 345 399 55,000 56,000 91 199 295 354 408 56,000 57,000 93 204 302 363 419 57,000 58,000 95 209 310 371 429 58,000 59,000 97 214 317 381 439 59,000 60,000 100 219 324 389 450 60,000 62,000 103 226 336 402 465 62,000 64,000 107 236 351 420 485 64,000 66,000 112 246 365 438 505 66,000 68,000 116 256 380 455 526 68,000 70,000 121 266 394 473 546 70,000 72,000 125 276 409 491 566 72,000 74,000 130 286 423 509 586 74,000 76,000 134 296 438 526 607 76,000 78,000 139 305 454 543 627 78,000 80,000 143 316 467 561 648 80,000 85,000 151 333 493 592 684 85,000 90,000 163 357 531 635 735 90,000 95,000 174 382 567 680 785 95,000 100,000 185 407 604 724 836 100,000 110,000 202 444 659 790 912 110,000 120,000 225 493 733 878 1,014 120,000 130,000 247 543 806 966 1,116 130,000 140,000 270 592 880 1,054 1,218 140,000 150,000 292 642 953 1,143 1,319 150,000 160,000 315 691 1,027 1,230 1,421 160,000 170,000 337 741 1,100 1,319 1,522 170,000 180,000 360 790 1,174 1,407 1,624 180,000 190,000 382 840 1,247 1,495 1,726 190,000 200,000 405 889 1,321 1,583 1,828 200,000 210,000 427 939 1,394 1,671 1,930 210,000 220,000 450 988 1,468 1,759 2,031 220,000 230,000 472 1,038 1,541 1,847 2,134 230,000 240,000 495 1,087 1,615 1,935 2,235 240,000 and up 517 1,137 1,688 2,024 2,336 SECTION 5. Ez40 EFFECTIVE DATE This revenue procedure applies to passenger automobiles (other than leased passenger automobiles) that are first placed in service by a taxpayer during calendar year 2009, and to leased passenger automobiles that are first leased by a taxpayer during calendar year 2009. Ez40 SECTION 6. Ez40 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Ez40 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Ez40 For further information regarding this revenue procedure, contact Mr. Ez40 Harvey at (202) 622-4930 (not a toll-free call). Ez40 Prev  Up  Next   Home   More Internal Revenue Bulletins