IRS written determination 201548005

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 201548005
Release Date: 11/27/2015
Index Number: 9100.04-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-----------------, ID No. ----------------
Telephone Number:
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Refer Reply To:
CC:ITA:7
PLR-104914-15
Date:
August 05, 2015
Re: Request for Extension of Time to Make the Election Not to Deduct the Additional
First Year Depreciation
Taxpayer=----------------------------------------------------------
A=---------
B=------
C=------------------
D=----------------------
Date1=--------------------------
Date2=------
Dear --------------:
This ruling responds to a letter dated January 30, 2015, and supplemental
correspondence, submitted by Taxpayer requesting an extension of timepursuant to
§§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations to
make the election not to deduct the additional first year depreciation under § 168(k) of
the Internal Revenue Code (Code) for all classes of qualified property placed in service
in the taxable year ended Date1.
FACTS
Taxpayer represents that the facts are as follows:
Taxpayer is a privately owned company taxed as a Subchapter S Corporation.
Taxpayer files Form 1120S, U.S. Income Tax Return for an S Corporation, on a
calendar-year basis. Taxpayer’s operations are conducted through various qualified
Subchapter S subsidiaries, which are disregarded entities for federal income tax
purposes, and other disregarded entities. Taxpayer is engaged in the business of
manufacturing and selling A and other B related products. Taxpayer’s various
manufacturing operations are located within the C. Taxpayer placed in service qualified

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2
property (as defined in § 168(k)(2)) during the taxable year ended Date1 (the Date2
taxable year).
Taxpayer timely electronically filed its Form 1120S for the taxable year ended
Date1 by the extended due date of the tax return. On this return, Taxpayer did not
claim the additional first year depreciation deduction for all classes of qualified property
placed in service by Taxpayer during the taxable year ended Date1. Taxpayer reported
income to its shareholders on Schedule K-1 on the basis that it made such election and
each shareholder filed its Date2 federal income tax return and paid income tax as
though Taxpayer made such election.
Taxpayer intended to make an election not to deduct the additional first year
depreciation under § 168(k) for all classes of qualified property placed in service in the
taxable year ended Date1. Taxpayer, however, inadvertently failed to attach the
election statement, as required by § 168(k), to its Form 1120S for the taxable year
ended Date1 with respect to all classes of qualified property.
Subsequent to filing its Form 1120S for the taxable year endedDate1, Taxpayer
discovered that it had failed to attach the election statement to the return for the taxable
year ended Date1 with respect to all classes of qualified property. Thereafter, Taxpayer
contacted D, a certified public accounting firm, for advice to correct this mistake. D
advised Taxpayer to file this request.
RULING REQUESTED
Taxpayer requests an extension of time pursuant to §§ 301.9100-1 and
301.9100-3 to file the election not to deduct the additional first year depreciation under
§ 168(k) for all classes of qualified property placed in service during the taxable year
ended Date1.
LAW AND ANALYSIS
Section 168(k)(1)provides a 50-percent additional first year depreciation
deduction for qualified property (i) acquired by a taxpayer after December 31, 2007, and
before January 1, 2015, and (ii) placed in service by the taxpayer before January 1,
2015 (or January 1, 2016, for qualified property described in § 168(k)(2)(B) or (C)).
Section 168(k)(2)(D)(iii) provides that a taxpayer may elect not to deduct the
additional first year depreciation for any class of property placed in service during the
taxable year. The term “class of property” is defined in § 1.168(k)-1(e)(2) of the Income
Tax Regulations as meaning, in general, each class of property described in § 168(e)
(for example, 5-year property). See section 5.01 of Rev. Proc. 2008-54, 2008-2 C.B.
722 (rules similar to the rules in § 1.168(k)-1 for “qualified property” or for “30-percent

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3
additional first year depreciation deduction” apply for purposes of § 168(k) as currently
in effect).
Section 1.168(k)-1(e)(1) provides that the election not to deduct additional first
year depreciation for a class of property applies to all qualified property that is in the
class of property and placed in service in the same taxable year.
Section 1.168(k)-1(e)(3)(i) provides that the election not to deduct additional first
year depreciation must be made by the due date (including extensions) of the federal
tax return for the taxable year in which the property is placed in service by the taxpayer.
Section 1.168(k)-1(e)(3)(ii) provides that the election not to deduct additional first
year depreciation must be made in the manner prescribed on Form 4562, “Depreciation
and Amortization,” and its instructions. The instructions to Form 4562 for the taxable
year ended Date1 provide that the election not to deduct the additional first year
depreciation is made by attaching a statement to the taxpayer’s timely filed tax return
indicating that the taxpayer is electing not to deduct the additional first year depreciation
and the class of property for which the taxpayer is making the election.
Under § 301.9100-1, the Commissioner has discretion to grant a reasonable
extension of time under the rules set forth in §§ 301.9100-2 and 301.9100-3 to make a
regulatory election.
Sections 301.9100-1 through 301.9100-3 provide the standards the
Commissioner will use to determine whether to grant an extension of time to make an
election. Section 301.9100-2 provides automatic extensions of time for making certain
elections. Section 301.9100-3 provides extensions of time for making elections that do
not meet the requirements of § 301.9100-2.
Section 301.9100-3(a) provides that requests for relief under § 301.9100-3 will be
granted when the taxpayer provides evidence to establish to the satisfaction of the
Commissioner that the taxpayer acted reasonably and in good faith, and the grant of
relief will not prejudice the interests of the government.
CONCLUSIONS
Based solely on the facts and representations submitted, we conclude that the
requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Accordingly,
Taxpayer is granted 60 calendar days from the date of this letter to make the election
not to deduct the additional first year depreciationunder § 168(k) for all classes of
property placed in service during the taxable year ended Date1 that qualify for additional
first year depreciation. The election must be made by Taxpayer filing an amended
federal tax return for that taxable year, with a statement indicating that Taxpayer is

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4
electing not to deduct the additional first year depreciation for all classes of qualified
property placed in service during that taxable year.
Except as specifically set forth above, we express no opinion concerning the
federal income tax consequences of the facts described above under any other
provisions of the Code (including other subsections of § 168). Specifically, no opinion is
expressed or implied on whether any item of depreciable property placed in service
during the taxable year ended Date1 is eligible for the additional first year depreciation
deduction.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.
In accordance with the power of attorney, we are sending a copy of this letter to
Taxpayer’s authorized representatives. We are also sending a copy of this letter to the
appropriate Industry Director, Large Business & International Division (LB&I).
Sincerely,
WILLIE E. ARMSTRONG, JR.
WILLIE E. ARMSTRONG, JR.
Senior Technician Reviewer, Branch 7
Office of Associate Chief Counsel
(Income Tax and Accounting)
Enclosures (2):
copy of this letter
copy for section 6110 purposes