26 U.S. Code § 1400I - Commercial revitalization deduction
(a) General rule
At the election of the taxpayer, either—
(1) one-half of any qualified revitalization expenditures chargeable to capital account with respect to any qualified revitalization building shall be allowable as a deduction for the taxable year in which the building is placed in service, or
(b) Qualified revitalization buildings and expenditures
For purposes of this section—
(1) Qualified revitalization building
The term “qualified revitalization building” means any building (and its structural components) if—
(A) the building is placed in service by the taxpayer in a renewal community and the original use of the building begins with the taxpayer, or
(2) Qualified revitalization expenditure
(A) In general
The term “qualified revitalization expenditure” means any amount properly chargeable to capital account for property for which depreciation is allowable under section 168 (without regard to this section) and which is—
(B) Certain expenditures not included
(i) Acquisition cost In the case of a building described in paragraph (1)(B), the cost of acquiring the building or interest therein shall be treated as a qualified revitalization expenditure only to the extent that such cost does not exceed 30 percent of the aggregate qualified revitalization expenditures (determined without regard to such cost) with respect to such building.
(c) Dollar limitation
The aggregate amount which may be treated as qualified revitalization expenditures with respect to any qualified revitalization building shall not exceed the lesser of—
(d) Commercial revitalization expenditure amount
(1) In general
The aggregate commercial revitalization expenditure amount which a commercial revitalization agency may allocate for any calendar year is the amount of the State commercial revitalization expenditure ceiling determined under this paragraph for such calendar year for such agency.
(2) State commercial revitalization expenditure ceiling
The State commercial revitalization expenditure ceiling applicable to any State—
(A) for each calendar year after 2001 and before 2010 is $12,000,000 for each renewal community in the State, and
(3) Commercial revitalization agency
For purposes of this section, the term “commercial revitalization agency” means any agency authorized by a State to carry out this section.
(e) Responsibilities of commercial revitalization agencies
(1) Plans for allocation
Notwithstanding any other provision of this section, the commercial revitalization expenditure amount with respect to any building shall be zero unless—
(A) such amount was allocated pursuant to a qualified allocation plan of the commercial revitalization agency which is approved (in accordance with rules similar to the rules of section 147 (f)(2) (other than subparagraph (B)(ii) thereof)) by the governmental unit of which such agency is a part, and
(2) Qualified allocation plan
For purposes of this subsection, the term “qualified allocation plan” means any plan—
(A) which sets forth selection criteria to be used to determine priorities of the commercial revitalization agency which are appropriate to local conditions,
(B) which considers—
(i) the degree to which a project contributes to the implementation of a strategic plan that is devised for a renewal community through a citizen participation process,
(f) Special rules
(1) Deduction in lieu of depreciation
The deduction provided by this section for qualified revitalization expenditures shall—
(A) with respect to the deduction determined under subsection (a)(1), be in lieu of any depreciation deduction otherwise allowable on account of one-half of such expenditures, and
(2) Basis adjustment, etc.
(3) Substantial rehabilitations treated as separate buildings
A substantial rehabilitation (within the meaning of section 47(c)(1)(C)) of a building shall be treated as a separate building for purposes of subsection (a).
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