SECTION 8. MODIFICATION OF REV.

PROC. 2009–16

To address how a taxpayer whose first taxable year ending after March 31, 2008, ends before December 31, 2008, makes a § 168(k)(4) election when the taxpayer’s succeeding taxable year is a short taxable year:

.01 Section 3.02(1)(a)(ii) of Rev. Proc. 2009–16 is modified to read as follows: (ii) Except as provided in section 3.03(3) of this revenue procedure, by filing an amended federal income tax return for such taxable year in the manner described in section 3.02(2) of this revenue

the taxpayer’s extension property bonus depreciation amount is computed in the manner described in section 5.02 of this revenue procedure, and the taxpayer’s allocation of the extension property bonus depreciation amount between the business credit limitation and AMT credit limitation under §§ 38(c) and 53(c), respectively, is made in the manner described in section 5.03 of this revenue procedure. If the taxpayer makes a late § 168(k)(4) extension property election in accordance with section 6.06 of this revenue procedure, the allocation under section 5.03 of this revenue procedure is reported with the taxpayer’s federal income tax return containing the late election.

(2) Controlled groups . If a member of a controlled group (as determined under section 6.04(1) of this revenue procedure) makes the § 168(k)(4) extension property election, the group extension property bonus depreciation amount is computed in the manner described in section 5.02(2) of this revenue procedure and each member’s proportionate share of the group extension property bonus depreciation amount is determined in the manner described in section 5.03(2) of this revenue procedure.

(3) S corporations . An S corporation is allowed to make the § 168(k)(4) extension property election in the time and manner described in section 6.02 or 6.03 of this revenue procedure, as applicable. The effects of the § 168(k)(4) extension property election on an electing S corporation and its shareholders are the same as those described in section 6.01 and section 6.02 of Rev. Proc. 2009–16 (relating to the effects of the § 168(k)(4) election on an electing S corporation and its shareholders).

(4) Partnerships with corporate part- ners that make the § 168(k)(4) extension property election . If a corporation makes the § 168(k)(4) extension property election and is a partner in a partnership (electing corporate partner), the partnership must provide the electing corporate partner with sufficient information to apply § 168(k)(4)(G)(ii) in determining its distributive share of partnership items under § 702 relating to any extension property placed in service by the partnership during the taxable year. This information must be provided in the time and manner required under § 6031(b) and § 1.6031(b)–1T(a)(3)(ii) and (b). If the partnership has filed its federal tax return

for its first taxable year ending after December 31, 2008, on or before July 20, 2009, and did not provide the electing corporate partner with sufficient information to apply § 168(k)(4)(G)(ii) with respect to extension property, the partnership must provide such information to the electing corporate partner by the later of October 20, 2009, or 90 calendar days after receiving the corporate partner’s notification as required by section 6.02 of this revenue procedure. The determination of the electing corporate partner’s distributive share of items relating to extension property is made in the manner described in section 5.01(2) of Rev. Proc. 2009–16. .06 Limited Relief for Late § 168(k)(4) Extension Property Election .

(1) Automatic 6-Month Extension . Pursuant to § 301.9100–2(b), an automatic extension of 6 months from the due date of the federal income tax return ( excluding extensions) for the taxpayer’s first taxable year ending after December 31, 2008, is granted to make the § 168(k)(4) extension property election, provided the taxpayer timely filed the taxpayer’s federal income tax return for the taxpayer’s first taxable year ending after December 31, 2008, and the taxpayer satisfies the requirements in § 301.9100–2(c) and (d).

(2) Other Extensions . A taxpayer that fails to make the § 168(k)(4) extension property election for the taxpayer’s first taxable year ending after December 31, 2008, as provided in section 6.02, 6.03, 6.04, or 6.06(1) of this revenue procedure but wants to do so must file a request for an extension of time to make the election under the rules in § 301.9100–3.