SECTION 3. CLAIMING THE

KANSAS ADDITIONAL FIRST YEAR DEPECIATION FOR THE TAXABLE YEAR THAT INCLUDES MAY 5, 2007

.01 In General . The Kansas additional first year depreciation deduction is allowable in the taxable year in which the RA property is placed in service by the taxpayer. The computation of the allowable Kansas additional first year depreciation deduction and the otherwise allowable depreciation deduction for RA property is made in accordance with rules similar to the rules for 50-percent bonus depreciation property in § 1.168(k)–1(d)(1)(i), (1)(iii), and (2). Further, rules similar to the rules in § 1.168(k)–1(f) apply for purposes of the Kansas additional first year depreciation deduction.

.02 Returns Not Filed for the Taxable Year that Includes May 5, 2007 . If a taxpayer has not filed its federal tax return for the taxable year that includes May 5, 2007, and wants to claim the Kansas additional first year depreciation for a class of property (as defined in section 4.02 of this notice) that is RA property placed in service by the taxpayer on or after May 5, 2007, during the taxable year that includes May 5, 2007, the taxpayer may claim the Kansas additional first year depreciation for that class of property on line 14 of Form 4562, Depreciation and Amortiza- tion, for the federal tax return for the taxable year that includes May 5, 2007. If the RA property is listed property under § 280F(d)(4), such as passenger automobiles or computers, the taxpayer may claim the Kansas additional first year depreciation for that listed property on line 25 of Form 4562, Depreciation and Amortiza- tion, for the federal tax return for the taxable year that includes May 5, 2007.

.03 Returns Filed for the Taxable Year that Includes May 5, 2007 .

(1) In general . If a taxpayer timely filed its federal tax return for the taxable year that includes May 5, 2007, and did not claim on that return the Kansas additional first year depreciation for a class of prop

erty that is RA property placed in service by the taxpayer on or after May 5, 2007, during the taxable year that includes May 5, 2007, but wants to do so, the taxpayer may claim the Kansas additional first year depreciation for that class of property under this section 3.03, provided the taxpayer did not make an election not to deduct the Kansas additional first year depreciation for the class of property pursuant to section 4.03 of this notice. The taxpayer has the option of claiming the Kansas additional first year depreciation for the taxable year that includes May 5, 2007:

(a) by filing an amended federal tax return (or a qualified amended return under Rev. Proc. 94–69, 1994–2 C.B. 804, if applicable) on or before December 31, 2009, for the taxable year that includes May 5, 2007, and any affected subsequent taxable year, and including the statement “Filed Pursuant to Notice 2008–67” at the top of any amended return (or qualified amended return);

(b) by filing a Form 3115, Application for Change in Accounting Method, with the taxpayer’s timely filed federal tax return for the first taxable year succeeding the taxable year that includes May 5, 2007, if this return has not been filed on or before August 11, 2008, and the taxpayer owns the property as of the first day of this taxable year; or

(c) if the taxpayer’s federal tax return for the first taxable year succeeding the taxable year that includes May 5, 2007, was filed on or before August 11, 2008, by (i) filing an amended federal tax return (or a qualified amended return) on or before December 31, 2009, for the first taxable year succeeding the taxable year that includes May 5, 2007, attaching a Form 3115 to the amended federal tax return, and including the statement “Filed Pursuant to Notice 2008–67” at the top of any amended return (or qualified amended return); or

(ii) filing a Form 3115 with the taxpayer’s timely filed federal tax return for the second taxable year succeeding the taxable year that includes May 5, 2007, if the taxpayer owns the property as of the first day of this taxable year.

(2) Automatic change in method of ac- counting . The Form 3115 is to be completed and filed in accordance with the automatic change in method of accounting

2008–32 I.R.B. 308 August 11, 2008

to, or written on, the return (for example, writing on the Form 4562 “not deducting bonus for 5-year property”); or

(iii) made the deemed election provided for in section 4.03(3)(b) of this notice.

(b) Deemed election . If section 4.03(3)(a)(i) or (ii) of this notice does not apply, a taxpayer that files its federal tax return for the taxable year that includes May 5, 2007, before August 11, 2008, will be treated as having made the election not to deduct the Kansas additional first year depreciation for a class of property that is RA property placed in service by the taxpayer on or after May 5, 2007, during the taxable year that includes May 5, 2007, if the taxpayer:

(i) on that return, did not claim the Kansas additional first year depreciation deduction for that class of property but did claim depreciation; and

(ii) does not file an amended federal tax return (or qualified amended return) or a Form 3115 within the time and in the manner prescribed in section 3.03(1) of this notice to claim the Kansas additional first year depreciation for that class of property for the taxable year that includes May 5, 2007.