completion, the capital gain will be a long-term capital gain. There are no preferential capital gains rates for corporations, but if the taxpayer were an individual, the long-term capital gain rate would be 15% under current laws.
Potential limitations on the application or effect of the Section 181 deduction under existing tax law may include the “At-Risk Rules” (under which a taxpayer may only take a deduction for direct investment and borrowed amounts for which the taxpayer has ultimate direct recourse liability), the Alternative Minimum Tax (though as long as the production activity constitutes a trade or business (for individuals) or is deductible for purposes of calculating “earnings and profits” (corporations) the deduction should not trigger the alternative minimum tax) and established case law relating to the Internal Revenue Service’s ability to recast a