SECTION 2. BACKGROUND

Prior to the enactment of the Small Business and Work Opportunity Tax Act of 2007, Pub. L. No. 110–28, 121 Stat. 190 (2007) (the Act), § 179(b)(1) prescribed a $100,000 limitation (the $100,000 amount) on the aggregate cost of section 179 property that could be treated as an expense for any taxable year beginning after 2002 and before 2010. For those same taxable years, section 179(b)(2) provided that the $100,000 amount is reduced by the amount by which the cost of section 179 property placed in service during the taxable year exceeds $400,000 (the $400,000 amount). Both the $100,000 amount and the $400,000 amount were adjusted for inflation annually. For taxable years beginning in 2007, section 3.19 of Rev. Proc. 2006–53 provides that the $100,000 amount and the

September 24, 2007 679 2007–39 I.R.B.