IRS written determination 201437010

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: 201437010
Release Date: 9/12/2014
Index Number: 168.36-00
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
--------------------------------, ID No. ----------
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Telephone Number:
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Refer Reply To:
CC:ITA:B07
PLR-148927-13
Date:
May 30, 2014
Re: ---------------------------------------------------------------------------------------------------------------
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Legend
Taxpayer = ---------------------------------------------------
Date 1 = ----------------------------
Date 2 = ----------------------------
Date 3 = -------------------
Date 4 = ----------------------
A = -------------------------------------------
B = --------------------------------------------------
C = ----------------------------

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Dear ---- -------------------:
This letter responds to a letter dated November 13, 2013, submitted by Taxpayer
on behalf of itself, requesting to revoke Taxpayer’s election under § 168(k)(2)(D)(iii) of
the Internal Revenue Code not to deductthe additional first year depreciation under
§ 168(k)(2) and (k)(5) of the Internal Revenue Codefor all classes of qualified property
placed in service by Taxpayer during the taxable years ended Date 1, and Date 2.
FACTS
Taxpayer represents that the facts are as follows:
Taxpayer is an LLC that has elected since its inception to be taxed as a C
corporation. Taxpayer has a fiscal year ending on Date 4. Taxpayer uses the overall
cash receipts and disbursements method of accounting. Taxpayer is a A, and is
engaged in the business of providing B.
Taxpayer placed in service qualified property (as defined in § 168(k)(2) before
the application of § 168(k)(2)(D)(iii)) during the taxable years ended Date 1, and Date 2.
The period of limitation on assessment under § 6501(a) for the taxable years ended
Date 1, and Date 2, have not expired as of the date of this letter.
Taxpayer used C, an outside tax preparer, to prepare its federal income tax
returns for the taxable years ended Date 1, and Date 2. Taxpayer made the election
not to claim the additional first year depreciation deduction for all classes of qualified
property placed in service by Taxpayer, as required by § 1.168(k)-1(e)(3)(ii) of the
Income Tax Regulations, on its federal income tax returnsfor the taxable years ended
Date 1, and Date 2. C did not discuss the election or any of its ramifications with the
Taxpayer. These returns did not include an election to apply § 168(k)(4).
On Date 3, after having both returns reviewed by a third party,Taxpayer
contacted C to question why the election was made not to claim the additional first year
depreciation deduction for all classes of qualified property placed in service by Taxpayer
for the taxable years ended Date 1, and Date 2. On or after Date 3, C then discussed
the ramifications of the election and its significance to the Taxpayer for the taxable
years ended Date 1, and Date 2. Further, C advised Taxpayer that if they decided to
claim the additional first year depreciation deduction for all classes of qualified property
placed in service by Taxpayerto the federal income tax returnsfor the taxable years
ended Date 1, and Date 2, they would need to request relief from the IRS in the form of
a letter ruling request. Thereafter, Taxpayeradvised C they wished to file this request.
RULING REQUESTED
Taxpayer requests consent to revoke its election not to deduct the additional first

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year depreciation under § 168(k)(1) and (k)(5) for all qualified property placed in service
during the taxable years ended Date 1, and Date 2.
LAW AND ANALYSIS
Section 168(k)(1)provides a 50-percent additional first year depreciation
deduction for theplaced-in-service year for qualified property (i) acquired by a taxpayer
after December 31, 2007, and before September 9, 2010, or acquired by a taxpayer
generally after December 31, 2011, and (ii) placed in service by the taxpayer before
January 1, 2014 (or January 1, 2015, for qualified property described in § 168(k)(2)(B)
or (C)).
Section 168(k)(5) provides a 100-percent additional first year depreciation
deduction for the placed-in-service year for qualified property acquired by a taxpayer
after September 8, 2010, and generally before January 1, 2012, and placed in service
by the taxpayer before January 1, 2012 (or January 1, 2013, for qualified property
described in § 168(k)(2)(B) or (C)). See section 3 of Rev. Proc. 2011-26, 2011-16 I.R.B.
664, 665.
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) 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, andsection 3.01 of Rev.
Proc. 2011-26, 2011-16 I.R.B. at 665 (rules similar to the rules in § 1.168(k)-1 for
“qualified property” or for “30-percent additional first year depreciation deduction” apply
for purposes of§ 168(k) as currently in effect).
Section 1.168(k)-1(e)(7)(i) provides that an election not to deduct the additional
first year depreciation for a class of property that is qualified property,once made, may
be revoked only with the written consent of the Commissioner of Internal Revenue. To
seek the Commissioner's consent, the taxpayer must submit a request for a letter ruling.
CONCLUSION
Based solely on the facts and representations submitted, we conclude that a
revocation of Taxpayer's election not to deduct the additional first year depreciation
under § 168(k)(1) and (k)(5) for all eligible classes of property placed in service by
Taxpayer in the taxable years ended Date 1, and Date 2, is permitted under § 1.168(k)-
1(e)(7)(i). Accordingly, Taxpayeris granted 60 calendar days from the date of this letter
to revoke its election not to deduct the additional first year depreciation under
§ 168(k)(1) and (k)(5) for all eligible classes of property placed in service by Taxpayer in
the taxable years endedDate 1, and Date 2. The revocation must be made in a written
statement filed with Taxpayer's amended consolidated federal tax returns for the taxable

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years ended Date 1, and Date 2. In addition, a copy of this letter must be attached to
such amended return. A copy is enclosed for that purpose.
Except as specifically ruled upon above, no opinion is expressed or implied
concerning the tax consequences of the facts described above under any other
provisions of the Code. Specifically, no opinion is expressed or implied on (1) whether
any item of depreciable property placed in service by Taxpayer in taxable years ended
Date 1, and Date 2 is eligible for the 50-percent or 100-percent additional first year
depreciation deduction under §168(k), or (2) if any item of such property is eligible for
the additional first year depreciation deduction, whether that item is qualified property as
defined in § 168(k)(2).
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).
This letter ruling is directed only to the taxpayer requesting it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.
Sincerely yours,
Karla M. Meola
Karla M. Meola
Assistant to the Branch Chief, Branch 7
Office of Associate Chief Counsel
(Income Tax & Accounting)
Enclosures (2):
copy of this letter
copy for section 6110purposes