SECTION 8. ELECTIVE EXPENSING

PROVISIONS (§§ 179B(a), 181, and 194(b))

.01 Treatment of qualified film and tele- vision productions .

(1) Description of change . This change applies to a taxpayer that wants to elect under § 181 to treat the production costs (as defined in § 1.181–1T(a)(3)) of any qualified film or television production (as defined in § 181(d) and § 1.181–3T) as an expense that is not chargeable to a capital account and to deduct the cost.

(2) Scope .

(a) Applicability . This change in method of accounting applies to:

(i) A qualified film or television production commencing after October 22, 2004, and before January 1, 2009. A production commences when principal photography begins with respect to the production; and

(ii) A taxpayer that, before June 15, 2006, filed its federal tax return for the taxable year in which production costs were first paid or incurred, and that wants to make a § 181 election for that taxable year.

(b) Inapplicability . This change does not apply to:

(i) Any qualified film or television production, the production cost of which exceeds $15,000,000 (or $20,000,000 for the areas specified in § 181(a)(2)(B)). See § 1.181–1T(b) for further guidance; or

(ii) A taxpayer that made the § 181 election for the taxable year in which the production costs were first paid or incurred by filing an amended federal tax return for that taxable year, and all subsequent affected taxable year(s), on or before November 15, 2006.

(3) Time for making the change . The change in method of accounting under section 8.01 of this APPENDIX must be made for the taxpayer’s first or second taxable year ending on or after December 31, 2005.

(4) Scope limitations inapplicable . The scope limitations in section 4.02 of this revenue procedure are not applicable to this change.

(5) Additional requirements . (a) The change in accounting method results in items being omitted or duplicated and thus, an adjustment under § 481(a) must be computed; and

(b) The statement and information referenced in § 1.181–2T(e)(3) must be attached to the Form 3115.

(6) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under section 8.01 of this APPENDIX is “100.” See section 6.02(4) of this revenue procedure.

(7) Contact information . For further information regarding a change under this section, contact Bernard Harvey at 202–622–4930 (not a toll-free call).

.02 Expensing of certain reforestation expenditures .

(1) Description of change . This change applies to a taxpayer that wants to elect, under § 194(b), to treat up to $10,000 of reforestation expenditures with respect to any qualified timber property as an expense that is not chargeable to a capital account and to deduct those expenditures in the year paid or incurred under § 194(b). The remainder of the reforestation expenditures for the year may be amortized over 84 months under § 194(a).

(2) Scope .

(a) Applicability . This change in accounting method applies to:

(i) Reforestation expenditures paid or incurred after October 22, 2004, with respect to qualified timber property; and

(ii) A taxpayer that, before June 15, 2006, filed its federal tax return for a taxable year ending after October 22, 2004, in which reforestation expenditures were paid or incurred after October 22, 2004, with respect to qualified timber property, and that wants to make a § 194(b) election for the reforestation expenditures paid or incurred during that taxable year.

(b) Inapplicability . This change does not apply to:

(i) Reforestation expenditures paid or incurred on or before October 22, 2004; or

(ii) A taxpayer that made the § 194(b) election for the taxable year in which reforestation expenditures were paid or incurred after October 22, 2004, with respect to qualified timber property, by filing an amended federal tax return for that taxable

2008–36 I.R.B. 637 September 8, 2008

as deductible expenses or capital expenditures if the taxpayer treats these costs in accordance with Rev. Proc. 2000–50.

(2) Designated automatic accounting method change number . The designated automatic accounting method change number for a change under section 9.02 of this APPENDIX is “120.” See section 6.02(4) of this revenue procedure.

(3) Contact information . For further information regarding a change under this section, contact Douglas Kim at 202–622–4930 (not a toll-free call).