Sec. 131. Expensing for rural renewal community businesses
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Part IV of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 179E the following new section: A rural renewal community business may elect to treat the cost of any qualified property as property which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified property is placed in service. For purposes of this section, the term qualified property means property— which is— tangible property (to which section 168 applies), or computer software (as defined in section 197(e)(3)(B)) which is described in section 197(e)(3)(A)(i) and to which section 167 applies, which is section 1245 property (as defined in section 1245(a)(3)), and which is acquired by purchase (as defined in section 179(d)(2)) for use in the active conduct of a trade or business.
Such term shall not include any property described in section 50(b). For purposes of this section— The term rural renewal community business means— any rural renewal community business entity, and any rural renewal community proprietorship. The term rural renewal community business entity means, with respect to any taxable year, any corporation or partnership if for such year— every trade or business of such entity is the active conduct of a qualified business within a rural renewal community, at least 50 percent of the total gross income of such entity is derived from the active conduct of such business, a substantial portion of the use of the tangible property of such entity (whether owned or leased) is within an rural renewal community, a substantial portion of the intangible property of such entity is used in the active conduct of any such business, a substantial portion of the services performed for such entity by its employees are performed in a rural renewal community, at least 35 percent of its employees are residents of a rural renewal community, less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to nonqualified financial property (as defined in section 1397C(e)).
The term rural renewal community proprietorship means, with respect to any taxable year, any qualified business carried on by an individual as a proprietorship if for such year— at least 50 percent of the total gross income of such individual from such business is derived from the active conduct of such business in a rural renewal community, a substantial portion of the use of the tangible property of such individual in such business (whether owned or leased) is within a rural renewal community, a substantial portion of the intangible property of such business is used in the active conduct of such business, a substantial portion of the services performed for such individual in such business by employees of such business are performed in a rural renewal community, at least 35 percent of such employees are residents of a rural renewal community, less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to nonqualified financial property.
For purposes of this paragraph, the term employee includes the proprietor. The term rural renewal community has the meaning given such term under section 45D(f)(4)(C). For purposes of paragraphs
(2)and (3), rules similar to the rules of section 1397C(f) shall apply. For purposes of this section— Rules similar to the rules of section 179(d)(3) shall apply. Rules similar to the rules of section 179(d)(10) shall apply. This section shall not apply to property placed in service after December 31, 2019. . Section 263(a)(1) of the Internal Revenue Code of 1986 is amended by striking or at the end of subparagraph (K), by striking the period at the end of subparagraph
(L)and inserting , or , and by adding at the end the following new subparagraph: expenditures for which a deduction is allowed under section 179F. . Subparagraph
(B)of section 312(k)(3) is amended by striking or 179E each places it appears and inserting 179E, or 179F . Paragraphs (2)(C) and (3)(C) of section 1245(a) of such Code are each amended by inserting 179F, after 179E, . The table of contents for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179E the following new item: Sec. 179F. Expensing for rural renewal community businesses. . The amendments made by this section shall apply to property placed in service after December 31, 2016.