Browse Arkansas Code titles and sections
26-51-439. Capitalization of certain expenses.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-439. Capitalization of certain expenses.
(a) Title 26 U.S.C. § 263A(a)-(h), as in effect on January 1, 2019, regarding capitalization and inclusion in inventory costs of certain expenses, are adopted for the purpose of computing Arkansas income tax liability.
(b) Title 26 U.S.C. § 195, as in effect on January 1, 2001, regarding capitalization and amortization of a corporation's start-up expenses, is adopted for the purpose of computing Arkansas income tax liability.
(c) Title 26 U.S.C. § 248, as in effect on January 1, 2005, regarding capitalization and amortization of a corporation's organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
(d) Title 26 U.S.C. § 709, as in effect on January 1, 2007, regarding the amortization of partnership organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-439
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Record provenance
Stable record: arkansas_code:legal_authorities:26-51-439
Source file: gov.ar.code.title.26.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 97b8419a1a1e0e40c32b26c03d2d02b9754710bef79ece3548873be53d4242f9
Source location: content.xml paragraph 12983
Stored source content
26-51-439. Capitalization of certain expenses.
(a) Title 26 U.S.C. § 263A(a)-(h), as in effect on January 1, 2019, regarding capitalization and inclusion in inventory costs of certain expenses, are adopted for the purpose of computing Arkansas income tax liability.
(b) Title 26 U.S.C. § 195, as in effect on January 1, 2001, regarding capitalization and amortization of a corporation's start-up expenses, is adopted for the purpose of computing Arkansas income tax liability.
(c) Title 26 U.S.C. § 248, as in effect on January 1, 2005, regarding capitalization and amortization of a corporation's organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
(d) Title 26 U.S.C. § 709, as in effect on January 1, 2007, regarding the amortization of partnership organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Capitalization of expenditures** Except as otherwise provided in this section, no deduction shall be allowed for start-up expenditures.
**(b) Election to deduct**
(1) **Allowance of deduction** — If a taxpayer elects the application of this subsection with respect to any start-up expenditures—
(A) the taxpayer shall be allowed a deduction for the taxable year in which the active trade or business begins in an amount equal to the lesser of—
(i) the amount of start-up expenditures with respect to the active trade or business, or
(ii) $5,000, reduced (but not below zero) by the amount by which such start-up expenditures exceed $50,000, and
(B) the remainder of such start-up expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the active trade or business begins.
(2) **Dispositions before close of amortization period** — In any case in which a trade or business is completely disposed of by the taxpayer before the end of the period to which paragraph (1) applies, any deferred expenses attributable to such trade or business which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.
(3) **Special rule for taxable years beginning in 2010** — In the case of a taxable year beginning in 2010, paragraph (1)(A)(ii) shall be applied—
(A) by substituting “$10,000” for “$5,000”, and
(B) by substituting “$60,000” for “$50,000”.
**(c) Definitions** For purposes of this section—
(1) **Start-up expenditures** — The term “start-up expenditure” means any amount—
(A) paid or incurred in connection with—
(i) investigating the creation or acquisition of an active trade or business, or
(ii) creating an active trade or business,
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 195
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 195. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 920
TITLE 26—INTERNAL REVENUE CODE
§ 194A
EFFECTIVE DATE OF 1982 AMENDMENT
Amendment by Pub. L. 97–354 applicable to taxable
years beginning after Dec. 31, 1982, see section 6(a) of
Pub. L. 97–354, set out as an Effective Date note under
section 1361 of this title.
EFFECTIVE DATE
Pub. L. 96–451, title III, § 301(d), Oct. 14, 1980, 94 Stat.
1991, provided that: ‘‘The amendments made by this
section [enacting this section and amending sections 62
and 1245 of this title] shall apply with respect to addi-
tions to capital account made after December 31, 1979.’’
§ 194A. Contributions to employer liability trusts
(a) Allowance of deduction
There shall be allowed as a deduction for the
taxable year an amount equal to the amount—
(1) which is contributed by an employer to a
trust described in section 501(c)(22) (relating to
withdrawal liability payment fund) which
meets the requirements of section 4223(h) of
the Employee Retirement Income Security
Act of 1974, and
(2) which is properly allocable to such tax-
able year.
(b) Allocation to taxable year
In the case of a contribution described in sub-
section (a) which relates to any specified period
of time which includes more than one taxable
year, the amount properly allocable to any tax-
able year in such period shall be determined by
prorating such amounts to such taxable years
under regulations prescribed by the Secretary.
(c) Disallowance of deduction
No deduction shall be allowed under sub-
section (a) with respect to any contribution de-
scribed in subsection (a) which does not relate
to any specified period of time.
(Added Pub. L. 96–364, title II, § 209(c)(1), Sept. 26,
1980, 94 Stat. 1290, § 194; renumbered § 194A, Pub.
L. 97–448, title III, § 305(b)(1), Jan. 12, 1983, 96
Stat. 2399.)
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 195
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 195. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Election to deduct** If a corporation elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenditures—
(1) the corporation shall be allowed a deduction for the taxable year in which the corporation begins business in an amount equal to the lesser of—
(A) the amount of organizational expenditures with respect to the taxpayer, or
(B) $5,000, reduced (but not below zero) by the amount by which such organizational expenditures exceed $50,000, and
(2) the remainder of such organizational expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the corporation begins business.
**(b) Organizational expenditures defined** The term “organizational expenditures” means any expenditure which—
(1) is incident to the creation of the corporation;
(2) is chargeable to capital account; and
(3) is of a character which, if expended incident to the creation of a corporation having a limited life, would be amortizable over such life.
**(c) Time for and scope of election** The election provided by subsection (a) may be made for any taxable year but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The period so elected shall be adhered to in computing the taxable income of the corporation for the taxable year for which the election is made and all subsequent taxable years.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 248
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 248. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 993
TITLE 26—INTERNAL REVENUE CODE
§ 248
sale or exchange of such property shall be
treated as—
(A) for such amount of the income or gain
as is equal to or less than the amount of in-
come which would be included in income at
the time of contribution under subsection
(f)(3) but for the taxpayer’s election under
this subsection, ordinary income, and
(B) for any amounts of the income or gain
which are in excess of the amount of income
which would be included in income at the
time of contribution under subsection (f)(3)
but for the taxpayer’s election under this
subsection, having the same character as if
this subsection did not apply.
(3) Election
(A) In general
For each taxable year, a Settlement Trust
may elect to apply this subsection for any
property described in paragraph (1) which
was contributed during such year. Any prop-
erty to which the election applies shall be
identified and described with reasonable par-
ticularity on the income tax return or an
amendment or supplement to the return of
the Settlement Trust, with such election to
have effect solely for such taxable year.
(B) Revocation
Any election made by a Settlement Trust
pursuant to this subsection may be revoked
pursuant to a timely filed amendment or
supplement to the income tax return of such
Settlement Trust.
(C) Certain dispositions
(i) In general
In the case of any property for which an
election is in effect under this subsection
and which is disposed of within the first
taxable year subsequent to the taxable
year in which such property was contrib-
uted to the Settlement Trust—
(I) this section shall be applied as if
the election under this subsection had
not been made,
(II) any income or gain which would
have been included in the year of con-
tribution u
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 248
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 248. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Nondeductibility of certain direct and indirect costs**
(1) **In general** — In the case of any property to which this section applies, any costs described in paragraph (2)—
(A) in the case of property which is inventory in the hands of the taxpayer, shall be included in inventory costs, and
(B) in the case of any other property, shall be capitalized.
(2) **Allocable costs** — The costs described in this paragraph with respect to any property are—
(A) the direct costs of such property, and
(B) such property’s proper share of those indirect costs (including taxes) part or all of which are allocable to such property.
Any cost which (but for this subsection) could not be taken into account in computing taxable income for any taxable year shall not be treated as a cost described in this paragraph.
**(b) Property to which section applies** Except as otherwise provided in this section, this section shall apply to—
(1) **Property produced by taxpayer** — Real or tangible personal property produced by the taxpayer.
(2) **Property acquired for resale** — Real or personal property described in section 1221(a)(1) which is acquired by the taxpayer for resale.
For purposes of paragraph (1), the term “tangible personal property” shall include a film, sound recording, video tape, book, or similar property.
**(c) General exceptions**
(1) **Personal use property** — This section shall not apply to any property produced by the taxpayer for use by the taxpayer other than in a trade or business or an activity conducted for profit.
(2) **Research and experimental expenditures** — This section shall not apply to any amount allowable as a deduction under section 174 or 174A.
(3) **Certain development and other costs of oil and gas wells or other mineral property**
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 263A
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 263A. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1002
TITLE 26—INTERNAL REVENUE CODE
§ 263A
the expiration of the time for filing claim for credit or
refund of any overpayment of tax imposed by chapter
1 of such Code [section 1 et seq. of this title] with re-
spect to the taxpayer’s first taxable year to which the
amendments made by this section apply and for which
he pays or incurs costs to which such section 263(c) ap-
plies by reason of the amendments made by this sec-
tion. Any election under this paragraph may be
changed or revoked at any time before the expiration
of the time referred to in the preceding sentence, but
after the expiration of such time such election may not
be changed or revoked.’’
EFFECTIVE DATE OF 1976 AMENDMENT
Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(vii), Oct. 4,
1976, 90 Stat. 1817, provided that: ‘‘The amendments
made by this subparagraph [amending this section and
sections 6011, 6611, and 6651 of this title and repealing
sections 6076 and 6680 of this title] shall apply with re-
spect to acquisitions of stock or debt obligations made
after June 30, 1974, except that the repeal of paragraph
(2) of section 6011(d) under clause (ii) shall apply with
respect to loans and commitments made after such
date.’’
Amendment by section 2122(b)(2) of Pub. L. 94–455, as
amended by Pub. L. 96–167, § 9(c), Dec. 29, 1979, 93 Stat.
1278, applicable to taxable years beginning after Dec.
31, 1976, see section 2122(c) of Pub. L. 94–455, as amend-
ed, set out as an Effective Date note under section 190
of this title.
EFFECTIVE DATE OF 1971 AMENDMENT
Pub. L. 92–178, title I, § 109(d)(2), (3), Dec. 10, 1971, 85
Stat. 509, provided that:
‘‘(2) The amendment made by subsection (b) [amend-
ing this section] shall apply to taxable years ending
after December 31, 1970.
‘‘(3) The ame
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 263A
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 263A. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** Except as provided in subsection (b), no deduction shall be allowed under this chapter to the partnership or to any partner for any amounts paid or incurred to organize a partnership or to promote the sale of (or to sell) an interest in such partnership.
**(b) Deduction of organization fees**
(1) **Allowance of deduction** — If a partnership elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenses—
(A) the partnership shall be allowed a deduction for the taxable year in which the partnership begins business in an amount equal to the lesser of—
(i) the amount of organizational expenses with respect to the partnership, or
(ii) $5,000, reduced (but not below zero) by the amount by which such organizational expenses exceed $50,000, and
(B) the remainder of such organizational expenses shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the partnership begins business.
(2) **Dispositions before close of amortization period** — In any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.
(3) **Organizational expenses defined** — The organizational expenses to which paragraph (1) applies, are expenditures which—
(A) are incident to the creation of the partnership;
(B) are chargeable to capital account; and
(C) are of a character which, if expended incident to the creation of a partnership having an ascertainable life, would be amortized over such life.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 709
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 709. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1873
TITLE 26—INTERNAL REVENUE CODE
§ 709
Pub. L. 99–514, title XVIII, § 1812(c)(3)(A), Oct. 22, 1986,
100 Stat. 2834, provided that the amendment made by
that section is effective with respect to sales or ex-
changes after Sept. 27, 1985.
EFFECTIVE DATE OF 1984 AMENDMENT
Pub. L. 98–369, div. A, title I, § 73(b), July 18, 1984, 98
Stat. 592, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986,
100 Stat. 2095, provided that:
‘‘(1) IN
GENERAL.—The amendment made by sub-
section (a) [amending this section] shall apply—
‘‘(A) in the case of arrangements described in sec-
tion 707(a)(2)(A) of the Internal Revenue Code of 1986
[formerly I.R.C. 1954] (as amended by subsection (a)),
to services performed or property transferred after
February 29, 1984, and
‘‘(B) in the case of transfers described in section
707(a)(2)(B) of such Code (as so amended), to property
transferred after March 31, 1984.
‘‘(2) BINDING CONTRACT EXCEPTION.—The amendment
made by subsection (a) shall not apply to a transfer of
property described in section 707(a)(2)(B)(i) if such
transfer is pursuant to a binding contract in effect on
March 31, 1984, and at all times thereafter before the
transfer.
‘‘(3) EXCEPTION FOR CERTAIN TRANSFERS.—The amend-
ment made by subsection (a) shall not apply to a trans-
fer of property described in section 707(a)(2)(B)(i) that
is made before December 31, 1984, if—
‘‘(A) such transfer was proposed in a written private
offering memorandum circulated before February 28,
1984;
‘‘(B) the out-of-pocket costs incurred with respect
to such offering exceeded $250,000 as of February 28,
1984;
‘‘(C) the encumbrances placed on such property in
anticipation of such transfer all constitute obliga-
tions for which neither the partnership nor any part-
ner is li
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 709
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 709. This identifies an authority to review, not proof of applicability.