SECTION 6. MODIFICATION TO

REV. PROC. 2019-08

New section 4.01(3) of Rev. Proc. 2019-08 is added to read as follows: (3) Residential rental property held by an electing real property trade or business . Notwithstanding section 4.01(1) of this revenue procedure, the recovery period under the table in § 168(g)(2)(C) for taxable years beginning after December 31, 2017, is 30 years for residential rental property that:

(a) was placed in service by (i) the taxpayer before January 1, 2018, or (ii) the transferor of the residential rental property before January 1, 2018, if the acquisition of such property by the transferee-taxpayer is subject to § 168(i)(7),

(b) is held by an electing real property trade or business as defined in § 163(j)(7) (B) and the regulations thereunder, and

(c) was not subject to § 168(g)(1)(A), (B), (C), (D), or (E) prior to January 1, 2018, in the hands of (i) the taxpayer or (ii) the transferor if the acquisition of such property by the transferee-taxpayer is subject to § 168(i)(7).

See Rev. Proc. 2021-28, 2021-27 I.R.B. 5, for further guidance. In particular, see section 3.03 of Rev. Proc. 2021-28 regarding the rules applicable to acquisi

tions of residential rental property subject to § 168(i)(7).