SECTION 3. TIPA RETROACTIVE

APPLICATION OF 50-PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION

.01 Scope . This section 3 applies to a taxpayer that did not claim the 50-percent additional first year depreciation for some or all qualified property placed in service by the taxpayer after December 31, 2013, on its federal tax return for its taxable year beginning in 2013 and ending in 2014 (2013 taxable year) or its taxable year of less than 12 months beginning and ending in 2014 (2014 short taxable year). For purposes of this section 3:

(1) The term “qualified property” has the same meaning as that term is defined in § 168(k)(2), as amended by the TIPA;

(2) The term “2013 qualified property” means qualified property placed in service by the taxpayer before January 1, 2014, in its 2013 taxable year; and

(3) The term “2014 qualified property” means qualified property placed in service by the taxpayer after December 31, 2013, in its 2013 taxable year or 2014 short taxable year, as applicable.

.02 No Election Made To Not Deduct 50-Percent Additional First Year Depre- ciation . If, on its timely filed federal tax return for the 2013 taxable year or the 2014 short taxable year (both as defined in section 3.01 of this revenue procedure), as applicable, a taxpayer did not deduct the 50-percent additional first year depreciation for a class of property that is qualified property or for some or all of its 2014 qualified property, and did not make an election within the time and in the manner described in either section 2.01(3) or section 3.04(2) of this revenue procedure not to deduct the 50-percent additional first year depreciation deduction for the class of property in which the qualified property or the 2014 qualified property, as applicable, is included, the taxpayer may claim the 50-percent additional first year depreciation for that class by filing either:

(1) An amended federal tax return for the 2013 taxable year or the 2014 short taxable year, as applicable, before the taxpayer files its federal tax return for the first taxable year succeeding the 2013 taxable year or the 2014 short taxable year, as applicable. If the taxpayer has both a 2013 taxable year and a 2014 short taxable year, and has timely filed federal tax returns for both such years, the amended federal tax returns for both the 2013 taxable year and the 2014 short taxable year must be filed before the taxpayer files its federal tax return for the first taxable year succeeding the 2014 short taxable year; or

(2) A Form 3115, Application for Change in Accounting Method, under section 6.01 of Rev. Proc. 2015–14, 2015–5 I.R.B. 450, 459, with the taxpayer’s timely filed federal tax return for the first or second taxable year succeeding the 2013 taxable year or the 2014 short taxable year, as applicable, if the taxpayer owns the property as of the first day of the year of change (as defined in section 3.19 of Rev. Proc. 2015–13, 2015–5 I.R.B. 419, 429). If the taxpayer has both a 2013 taxable year and a 2014 short taxable year, and has timely filed federal tax returns for both such years, the Form 3115 must be filed with the taxpayer’s timely filed federal tax return for the first or second taxable year succeeding the 2014 short taxable year if the taxpayer owns the property as of the first day of the year of change.

.03 Consent Granted to Revoke Elec- tion to Not Deduct 50-Percent Additional First Year Depreciation . If, on its timely filed federal tax return for the 2013 taxable year or the 2014 short taxable year, as applicable, a taxpayer made an election within the time and in the manner described in section 2.01(3) of this revenue procedure to not deduct the 50-percent additional first year depreciation for a class of property that is qualified property, the Commissioner grants the taxpayer consent to revoke that election, provided the taxpayer files an amended federal tax return for the 2013 taxable year or the 2014 short taxable year, as applicable, in a manner that is consistent with the revocation of the election and by the later of (1) December 4, 2015, or (2) before the taxpayer files its federal tax return for the first taxable year succeeding the 2013 taxable year or the 2014 short taxable year.

.04 Election To Not Deduct 50-Percent Additional First Year Depreciation .

(1) In general . A taxpayer that timely filed its federal tax return for the 2013 taxable year or the 2014 short taxable year, as applicable, has made the election to not deduct the 50-percent additional first year depreciation for a class of property that is qualified property if the taxpayer made the election within the time and in the manner provided in section 2.01(3) of this revenue procedure and did not revoke that election within the time and in the manner provided in section 3.03 of this revenue procedure.

(2) Deemed election . If section 3.04(1) of this revenue procedure does not apply, a taxpayer that timely filed its federal tax return for the 2013 taxable year or the 2014 short taxable year, as applicable, will be treated as making the election to not deduct the 50-percent additional first year depreciation for a class of property that is qualified property if the taxpayer:

(a) On that return, did not deduct the 50-percent additional first year depreciation for that class of property but did deduct depreciation; and

(b) Does not file an amended federal tax return or a Form 3115 within the time and in the manner provided in section 3.02 or section 3.03 of this revenue procedure, as applicable, to claim the 50-percent additional first year depreciation for the class of property.

Bulletin No. 2015–40 471 October 5, 2015

sion property by applying the election procedures in section 4.02 or 4.03 of Rev. Proc. 2009–33, as applicable, or by meeting the deemed election requirements in section 4.02(b) or (c) of this revenue procedure, as applicable. If the taxpayer has timely filed such federal income tax return and did not make the election not to apply § 168(k)(4) to round 4 extension property but wants to do so, see section 4.04 of Rev. Proc. 2009–33 for how to make a late election. In applying section 4.02, 4.03, or 4.04 of Rev. Proc. 2009–33, as applicable, the taxpayer should make the following substitutions:

(i) “round 4 extension property” is substituted for “extension property”;

(ii) “December 31, 2013” is substituted for “December 31, 2008”; and

(iii) “The TIPA” is substituted for “The Act”.

(b) Deemed election for taxpayers that are not members of a controlled group of corporations . This section 4.02(2)(b) applies to a corporate taxpayer that is not a member of a controlled group of corporations (as defined in § 168(k)(4)(C)(iv) and in section 2.05 of Rev. Proc. 2009–16, 2009–6 I.R.B. 449). If that taxpayer timely filed its original federal income tax return for its first taxable year ending after December 31, 2013, on or before December 4, 2015, the taxpayer will be treated as making the election not to apply § 168(k)(4) to round 4 extension property if the taxpayer:

(i) Filed, with its original federal income tax return for the taxpayer’s first taxable year ending after December 31, 2013, the Form 4562, Depreciation and Amortization (Including Information on Listed Property), indicating that the taxpayer: (A) claimed the additional first year depreciation deduction for all round 4 extension property placed in service by the taxpayer during that taxable year (unless the taxpayer made the election under § 168(k)(2)(D)(iii) for the class of property in which the round 4 extension property is included); and (B) used the applicable depreciation method for such property under § 168(b) (unless the taxpayer elected the alternative depreciation system under § 168(g)(7) for the class of property in which the round 4 extension property is included); and

(3) Application . If the taxpayer makes the election under section 3.04(1) or (2) of this revenue procedure for its 2013 taxable year, the election applies to both 2013 qualified property and 2014 qualified property in the same class of property for which the election is made. If the taxpayer makes the election under section 3.04(1) or (2) of this revenue procedure for its 2014 short taxable year, the election applies to 2014 qualified property in the same class of property for which the election is made.