*NOTE: This section includes amendments by temporary legislation that will expire on September 25, 2026. To view the text of this section after the expiration of all emergency and temporary legislation affecting this section, click this link: Permanent Version.*

The basis used in determining the amount allowable as a deduction from gross income under the provisions of §§ 47-1803.03(a)(7) and 47-1803.04(e)(3) shall be the same basis as that provided for determining the gain from the sale or other disposition of property for federal income tax purposes under the Internal Revenue Code of 1986; provided, that no adjustment shall be made for:

1. (1) The amount of the special depreciation allowance under section 168(k) of the Internal Revenue Code of 1986 [26 U.S.C. § 168(k)]; and
2. (2) The amount of the cost of property elected to be treated as chargeable to capital account under section 179 of the Internal Revenue Code of 1986 [26 U.S.C. § 179] in excess of the lesser of $25,000 ($40,000 in the case of a Qualified High Technology Company) or the actual cost of such property.
3. (3) The amount of special depreciation allowance under section 168(n) of the Internal Revenue Code of 1986; and
4. (4) A depreciation deduction may be allowed for an investor in a shared equity financing agreement as provided in § 47-3507.

History

July 16, 1947, 61 Stat. 351, ch. 258, art. I, title XI, § 6

Oct. 31, 1969, 83 Stat. 177, Pub. L. 91-106, title VI, § 601(c)(4)

June 24, 1987, D.C. Law 7-9, § 2(m), 34 DCR 3283

Oct. 1, 1987, D.C. Law 7-29, § 2(k)(3), 34 DCR 5097

enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575

Oct. 1, 2002, D.C. Law 14-190, § 832(b), 49 DCR 6968

Aug. 16, 2008, D.C. Law 17-219, § 7107(b), 55 DCR 7598

Feb. 12, 2026, D.C. Law 26-89, § 2(l)

Editor's Notes

Section 7108 of D.C. Law 17-219 provided that this subtitle shall apply for taxable years beginning after December 31, 2007.

References in Text

Section 168(k) of the Internal Revenue Code of 1986, referred to in the section is codified as 26 U.S.C. § 168(k).

Emergency Legislation

For temporary (90 day) amendment of section, see § 2(b) of Depreciation Allowance for Small Business De-Coupling from the Internal Revenue Code Emergency Act of 2005 (D.C. Act 16-240, December 22, 2005, 53 DCR 260).

For temporary (90 day) amendment of section, see § 2(b) of Depreciation Allowance for Small Business De-Coupling for the Internal Revenue Code Congressional Review Emergency Amendment Act of 2005 (D.C. Act 16-59, March 17, 2005, 52 DCR 3193).

For temporary (90 day) amendment of section, see § 2(b) of Depreciation Allowance for Small Business De-Coupling from the Internal Revenue Code Second Emergency Act of 2004 (D.C. Act 15-644, December 29, 2004, 52 DCR 229).

For temporary (90 day) amendment of section, see § 2(b) of Depreciation Allowance for Small Business De-Coupling from the Internal Revenue Code Emergency Amendment Act of 2004 (D.C. Act 15-379, February 27, 2004, 51 DCR 2645).

For temporary (90 day) amendment of section, see § 2(b) of Bonus Depreciation De-coupling from the Internal Revenue Code Emergency Act of 2002 (D.C. Act 14-341, April 24, 2002, 49 DCR 4291).

For temporary (90 days) amendment of this section, see § 2(l) of D.C. Income and Franchise Tax Conformity and Revision Emergency Amendment Act of 2025 (D.C. Act 26-214, Dec. 3, 2025, 72 DCR 13684).

Temporary Legislation

Section 4(b) of D.C. Law 15-322 provided that the act shall expire after 225 days of its having taken effect.

Section 2(b) of D.C. Law 15-322 amended the section to read as follows: “The basis used in determining the amount allowable as a deduction from gross income under the provisions of § 47-1803.03(a)(7) shall be the same basis as that provided for determining the gain from the sale or other disposition of property for federal income tax purposes under the Internal Revenue Code of 1986; provided, that no adjustment shall be made for the amount of the special depreciation allowance for property acquired after September 10, 2001 and before September 30, 2005 and subject to special rules pursuant to section 168(k) of the Internal Revenue Code of 1986. No deduction shall be allowed for the increased expensing for small businesses and subject to the special rules pursuant to section 179 of the Internal Revenue Code of 1986. No expensing of computer software shall be allowed. No increase shall be allowed in Qualifying investments at which phaseout begins.”

For temporary (225 day) amendment of section, see § 2(b) of Depreciation Allowance for Small Business De-Coupling From the Internal Revenue Code Temporary Act of 2004 (D.C. Law 15-160, May 18, 2004, law notification 51 DCR 5700).

For temporary (225 day) amendment of section, see § 2(b) of Bonus Depreciation De-Coupling From the Internal Revenue Code Temporary Act of 2002 (D.C. Law 14-175, July 23, 2002, law notification 49 DCR 8269).

For temporary (225 days) amendment of this section, see § 2(l) of D.C. Income and Franchise Tax Conformity and Revision Temporary Amendment Act of 2025 (D.C. Law 26-89, Feb. 12, 2026, 73 DCR 9).

Effect of Amendments

D.C. Law 17-219 rewrote the section, which had read as follows: “The basis used in determining the amount allowable as a deduction from gross income under the provisions of § 47-1803.03(a)(7) shall be the same basis as that provided for determining the gain from the sale or other disposition of property for federal income tax purposes under the Internal Revenue Code of 1986; provided, that no adjustment shall be made for the amount of the special depreciation allowance for property acquired after September 10, 2001 and before September 11, 2004 and subject to special rules pursuant to section 168(k) of the Internal Revenue Code of 1986.”

D.C. Law 14-190 rewrote the section which had read as follows: “The basis used in determining the amount allowable as a deduction from gross income under the provisions of § 47-1803.03(a)(7) shall be the same basis as that provided for determining the gain from the sale or other disposition of property for federal income tax purposes under the Internal Revenue Code of 1986.”

Prior Codifications

1973 Ed., § 47-1583e.

1981 Ed., § 47-1811.4.

Section References

This section is referenced in § 47-1803.03.