(a) (1) In the case of Section 24356 property, the term âreasonable allowanceâ as used in subdivision (a) of Section 24349, may, at the election of the taxpayer, include an allowance, for the first taxable year for which a deduction is allowable under Sections 24349 through 24354 to the taxpayer with respect to such property, of 20 percent of the cost of that property. (2) If in any one taxable year the cost of Section 24349 property with respect to which the taxpayer may elect an allowance under paragraph (1) for that taxable year exceeds ten thousand dollars ($10,000), then paragraph (1) applies with respect to those items selected by the taxpayer, but only to the extent of an aggregate cost of ten thousand dollars ($10,000). (b) (1) In lieu of subdivision (a), Section 179 of the Internal Revenue Code, relating to election to expense certain depreciable business assets, applies, except as otherwise provided. (2) Section 179(b)(1) of the Internal Revenue Code, relating to dollar limitation, does not apply and in lieu thereof, the aggregate cost that may be taken into account under Section 179(a) of the Internal Revenue Code, for any taxable year, shall not exceed twenty-five thousand dollars ($25,000). (3) Section 179(b)(2) of the Internal Revenue Code, relating to reduction in limitation, does not apply and in lieu thereof, the limitation under paragraph (2), for any taxable year, shall be reduced, but not below zero, by the amount by which the cost of Section 179 property, as defined in Section 179(d)(1) of the Internal Revenue Code, except as otherwise provided, that is placed in service during the taxable year, exceeds two hundred thousand dollars ($200,000). (4) Section 179 of the Internal Revenue Code is modified to provide that the âaggregate amount disallowedâ referred to in Section 179(b)(3)(B) of the Internal Revenue Code shall be computed under this part as that section read on the date the property generating the amount disallowed was placed in service. (5) Section 179(c)(2) of the Internal Revenue Code, relating to elections, shall not apply. (6) Section 179(d)(1)(A)(ii) of the Internal Revenue Code, relating to computer software, shall not apply. (7) Section 179(e) of the Internal Revenue Code, relating to special rules for qualified disaster assistance property, shall not apply. (c) (1) The election under this section for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. The election shall be made in such manner as the Franchise Tax Board may by regulations prescribe. (2) Any election made under this section shall not be revoked except with the consent of the Franchise Tax Board. (d) (1) For purposes of this section, the term âSection 24356 propertyâ means tangible personal property: (A) Of a character subject to the allowance for depreciation under Sections 24349 through 24354; (B) Acquired by purchase after December 31, 1958, for use in a trade or business, and (C) With a useful life (determined at the time of such acquisition) of six years or more. (2) For purposes of paragraph (1), the term âpurchaseâ means any acquisition of property, but only if: (A) The property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of losses under Section 24427 (but, in applying Section 267 of the Internal Revenue Code, relating to losses, expenses, and interest with respect to transactions between related taxpayers, for purposes of this section, Section 267(c)(4) of the Internal Revenue Code shall be treated as providing that the family of an individual shall include only the individualâs spouse, ancestors, and lineal descendants); (B) The property is not acquired by one member of an affiliated group from another member of the same affiliated group, and (C) The basis of the property in the hands of the person acquiring it is not determined in whole or in part
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