Page 106 - Large Business IRS Training Guides

Elections for Real Property Trades or Businesses

and Farming Businesses

• Real property trades or businesses or farming businesses

can make an election out of the IRC § 163(j) business

interest limitation.

• The election is made for each trade or business on a timely

filed return (including extensions). See Prop. Treas. Reg.

§ 1.163(j)-9 and Rev. Proc. 2018-59.

• The election is irrevocable.

• Alternative depreciation system (ADS) is required for certain

property. IRC § § 163(j)(7) & 168(g), & Rev. Proc. 2019-08.

• Taxpayer cannot take bonus depreciation.

• Switching to ADS generally is not a change in accounting method.

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