SECTION 2. BACKGROUND

Prior to the enactment of the Small Business Jobs Act of 2010, Pub. L. No. 111–240, 124 Stat. 2504 (2010) (the Small Business Jobs Act) and the Hiring Incentives to Restore Employment Act of 2010, Pub. L. No. 111–147, 124 Stat. 71 (2010) (the HIRE Act), § 179(b)(1) prescribed a $125,000 limitation (the $125,000 amount) on the aggregate cost of § 179 property that could be treated as an expense for taxable years beginning after 2006 and before 2011. For those same taxable years, § 179(b)(2) provided that the $125,000 amount is reduced by the amount by which the cost of § 179 property placed in service during the taxable years exceeds $500,000 (the $500,000 amount). Both the $125,000 amount and the $500,000 amount were adjusted for inflation annually under § 179(b)(5). For taxable years beginning in 2010, section 3.20 of Rev. Proc. 2009–50 provides that the $125,000 amount and the $500,000 amount, adjusted for inflation, are $134,000 and $530,000, respectively.

Section 102 of the Economic Stimulus Act of 2008, Pub. L. No. 110–185, 122 Stat. 613 (2008), changed the $125,000 amount and the $500,000 amount to $250,000 and $800,000, respectively, for taxable years beginning in 2008. Section 1202 of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. No. 111–5, 123 Stat. 115 (2009), extended the $250,000 amount and the $800,000 amount to taxable years beginning in 2009.

Section 201 of the HIRE Act changed the $125,000 amount and the $500,000 amount to $250,000 and $800,000, respectively, for taxable years beginning in 2010. To reflect the HIRE Act changes, Rev. Proc. 2010–24 modified section 3.20 of Rev. Proc. 2009–50 to provide that the $125,000 amount and the $500,000 amount are $250,000 and $800,000, respectively, for taxable years beginning in 2010. Subsequently, § 2021 of the Small Business Jobs Act extended and increased the $250,000 amount and the $800,000 amount to $500,000 and $2,000,000, re

spectively, for taxable years beginning in 2010 and 2011.