§263 Capital expenditures

2025—Subsec. (a)(1)(B). Pub. L. 119–21 inserted “or 174A” after “174”. 2018—Subsec. (a)(1)(F), (G). Pub. L. 115–141, § 401(a)(60), substituted comma for semicolon at end. Subsec. (a)(1)(H) to (L). Pub. L. 115–141, § 401(a)(61), redesignated subpars. (I) to (L) as (H) to (K), respectively. 2014—Subsec. (a)(1)(H). Pub. L. 113–295, § 221(a)(34)(D), struck out subpar. (H) which read as follows: “expenditures for which a deduction is allowed under section 179A,”. Subsec. (g)(2)(B)(iii). Pub. L. 113–295, § 221(a)(41)(G), struck out “, 244,” after “section 243”. 2006—Subsec. (a)(1)(L). Pub. L. 109–432 added subpar. (L). 2005—Subsec. (a)(1)(J). Pub. L. 109–58, § 1323(b)(2), added subpar. (J). Subsec. (a)(1)(K). Pub. L. 109–58, § 1331(b)(4), added subpar. (K). 2004—Subsec. (a)(1)(I). Pub. L. 108–357 added subpar. (I). Subsec. (g)(2)(B)(ii). Pub. L. 108–311 substituted “1276” for “1278”. 1997—Subsec. (a)(1)(H). Pub. L. 105–34 added subpar. (H). 1990—Subsec. (b). Pub. L. 101–508, § 11801(a)(16), struck out subsec. (b) “Expenditures for advertising and good will” which read as follows: “If a corporation has, for the purpose of computing its excess profits tax credit under chapter 2E or subchapter D of chapter 1 of the Internal Revenue Code of 1939 claimed the benefits of the election provided in section 733 or section 451 of such code, as the case may be, no deduction shall be allowable under section 162 to such corporation for expenditures for advertising or the promotion of good will which, under the

prescribed under section 733 or section 451 of such code, as the case may be, may be regarded as capital investments.” Subsec. (c). Pub. L. 101–508, § 11815(b)(3), substituted “section 613(e)(2)” for “section 613(e)(3)”. 1988—Subsec. (c). Pub. L. 100–647 substituted “section 59(e)” for “section 59(d)”. 1986—Subsec. (a)(1)(E) to (H). Pub. L. 99–514, § 402(b)(1), struck out subpar. (E) relating to nonapplication of par. (1) to expenditures by farmers for clearing land deductible under section 182, and redesignated subpars. (F) to (H) as (E) to (G), respectively. Subsec. (c). Pub. L. 99–514, § 701(e)(4)(D), substituted “59(d)” for “58(i)”. Pub. L. 99–514, § 411(b)(1)(B), inserted “and except as provided in subsection (i),”. Subsec. (g)(2)(B)(iv). Pub. L. 99–541, § 1808(b), added cl. (iv). Subsec. (i). Pub. L. 99–514, § 411(b)(1)(A), added subsec. (i). 1984—Subsec. (g)(2). Pub. L. 98–369, § 102(e)(7), amended par. (2) generally, striking out “charges for temporary use of the personal property in a short sale, or” after “(including” in subpar. (A)(ii), substituting “any amount treated as ordinary income under section 1271(a)(3)(A), 1278, or 1281(a) with respect to such property for the taxable year, and” for “any amount treated as ordinary income under section 1232(a)(3)(A) with respect to such property for the taxable year” in subpar. (B)(ii), and adding subpar. (B)(iii). Subsec. (g)(4). Pub. L. 98–369, § 102(e)(8), added par. (4). Subsec. (h). Pub. L. 98–369, § 56(a), added subsec. (h). 1983—Subsec. (g)(2)(A)(ii). Pub. L. 97–448, § 105(b)(1), substituted “all other amounts (including charges for temporary use of the personal property in a short sale, or to insure, store, or transport the personal property) paid or incurred to carry the personal property, over” for “amounts paid or incurred to insure, store, or transport the personal property, over”. Subsec. (g)(2)(B)(ii). Pub. L. 97–448, § 306(a)(9)(A), substituted “section 1232(a)(3)(A)” for “section 1232(a)(4)(A)”. 1982—Subsec. (c). Pub. L. 97–248, § 204(c)(1), inserted provision that this subsection not apply with respect to any costs to which any deduction is allowed under section 58(i) or 291. 1981—Subsec. (a)(1)(H). Pub. L. 97–34, § 202(d)(1), added subpar. (H). Subsec. (e). Pub. L. 97–34, § 201(c), struck out subsec. (e) which related to the allowance of repair expenses or specified repair, rehabilitation, or improvement expenditures. Subsec. (g). Pub. L. 97–34, § 502, added subsec. (g). 1980—Subsec. (a)(1)(G). Pub. L. 96–223 added subpar. (G). 1978—Subsec. (c). Pub. L. 95–618 inserted “and geothermal wells” after “gas wells” in heading and in text inserted provision that such

also grant the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e)(3)) to the same extent and in the same manner as such expenses are deductible in the case of oil and gas wells. 1976—Subsec. (a)(1)(F). Pub. L. 94–455, § 2122(b)(2), added subpar. (F). Subsec. (a)(3). Pub. L. 94–455, § 1904(b)(10)(A)(i)(I), struck out par. (3) which provided that no deduction be allowed for amounts paid as tax under section 4911 (relating to imposition of interest equalization tax) except as provided in subsec. (d). Subsec. (d). Pub. L. 94–455, §§ 1904(b)(10)(A)(i)(I), (II), 1906(b)(13)(A), redesignated subsec. (e) as (d) and struck out “or his delegate” after “Secretary” and substituted “subsection (e)” for “subsection (f)”. Former subsec. (d) was struck out. Subsec. (e). Pub. L. 94–455, §§ 1904(b)(10)(A)(i)(I), 1906(b)(13)(A), redesignated subsec. (f) as (e) and struck out “or his delegate” after “Secretary”. Former subsec. (e) redesignated (d). Subsec. (f). Pub. L. 94–455, §§ 1701(a), 1904(b)(10)(A)(i)(I), added subsec. (f). Former subsec. (f) redesignated (e). 1971—Subsec. (e). Pub. L. 92–178, § 109(c), substituted “shall, at the election of the taxpayer, be treated” for “shall be treated” and inserted provisions respecting making of election under this subsection for any taxable year at such time and in such manner as Secretary or his delegate prescribed by regulation and prohibiting making of election for any taxable year to which an election under subsec. (f) applies to railroad rolling stock (other than locomotives). Subsec. (f). Pub. L. 92–178, § 109(b), added subsec. (f). 1969—Subsec. (e). Pub. L. 91–172 added subsec. (e). 1965—Subsec. (a)(3). Pub. L. 89–243, § 4(p)(1), inserted “Except as provided in subsection (d)”, and struck out “except to the extent that any amount attributable to the amount paid as tax is included in gross income for the taxable year” after parenthetical provision. Subsec. (d). Pub. L. 89–243, § 4(p)(2), added subsec. (d). 1964—Subsec. (a)(3). Pub. L. 88–563 added par. (3). 1962—Subsec. (a)(1)(E). Pub. L. 87–834 added subpar. (E). 1960—Subsec. (a)(1)(D). Pub. L. 86–779 added subpar. (D).

of 2025 AmendmentAmendment by Pub. L. 119–21 applicable to amounts paid or incurred in taxable years beginning after Dec. 31, 2024, subject to election for retroactive application by certain small businesses and election to deduct certain unamortized amounts paid or incurred in taxable years beginning before Jan. 1, 2025, see section 70302(e), (f) of Pub. L. 119–21, set out as an

note under section 174A of this title.

of 2014 AmendmentAmendment by section 221(a)(41)(G) of Pub. L. 113–295 not applicable to preferred stock issued before Oct. 1, 1942 (determined in the same manner as under section 247 of this title as in effect before its repeal by Pub. L. 113–295), see section 221(a)(41)(K) of Pub. L. 113–295, set out as a note under section 172 of this title. Except as otherwise provided in section 221(a) of Pub. L. 113–295, amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a

, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

of 2006 AmendmentAmendment by Pub. L. 109–432 applicable to costs paid or incurred after Dec. 20, 2006, see section 404(c) of Pub. L. 109–432, set out as an

note under section 179E of this title.

of 2005 AmendmentAmendment by section 1323(b)(2) of Pub. L. 109–58 applicable to properties placed in service after Aug. 8, 2005, see section 1323(c) of Pub. L. 109–58, set out as an

note under section 179C of this title. Amendment by section 1331(b)(4) of Pub. L. 109–58 applicable to property placed in service after Dec. 31, 2005, see section 1331(d) of Pub. L. 109–58, set out as an

note under section 179D of this title.

of 2004 AmendmentAmendment by Pub. L. 108–357 applicable to expenses paid or incurred after Dec. 31, 2002, in taxable years ending after such date, see section 338(c) of Pub. L. 108–357, set out as an

note under section 179B of this title.

of 1997 Amendment Pub. L. 105–34, title XVI, § 1604(a)(4), Aug. 5, 1997, 111 Stat. 1097, provided that: “The

made by this subsection [amending this section and section 312 and 1245 of this title] shall take effect as if included in the

made by section 1913 of the Energy Policy Act of 1992 [Pub. L. 102–486].”

of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

of 1986 AmendmentAmendment by section 402(b)(1) of Pub. L. 99–514 applicable to amounts paid or incurred after Dec. 31, 1985, in taxable years ending after such date, see section 402(c) of Pub. L. 99–514 set out as an

of Repeal note under former section 182 of this title. Pub. L. 99–514, title IV, § 411(c), Oct. 22, 1986, 100 Stat. 2227, provided that: “(1) In general.—The

made by this section [amending this section and section 243, 291, 381, 616, and 617 of this title] shall apply to costs paid or incurred after December 31, 1986, in taxable years ending after such date. “(2) Transition rule.—The

made by this section shall not apply with respect to intangible drilling and development costs incurred by United States companies pursuant to a minority interest in a license for Netherlands or United Kingdom North Sea development if such interest was acquired on or before December 31, 1985.” Amendment by section 701(e)(4)(D) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an

note under section 55 of this title. Amendment by section 1808(b) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

of 1983 Amendment Pub. L. 97–448, title I, § 105(b)(2), Jan. 12, 1983, 96 Stat. 2385, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to property acquired, and positions established, by the taxpayer after September 22, 1982, in taxable years ending after such date.” Amendment by section 306 of Pub. L. 97–448 effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 311(d) of Pub. L. 97–448, set out as a note under section 31 of this title.

of 1982 AmendmentAmendment by Pub. L. 97–248 applicable to taxable years beginning after December 31, 1982, see section 204(d)(1) of Pub. L. 97–248, set out as an

note under section 291 of this title.

of 1981 AmendmentAmendment by section 201(c) and 202(d)(1) of Pub. L. 97–34 applicable to property placed in service after Dec. 31, 1980, in taxable years ending after that date, see section 209(a) of Pub. L. 97–34, set out as an

note under section 1092 of this title.

of 1980 AmendmentAmendment by Pub. L. 96–223 applicable to taxable years beginning after Dec. 31, 1979, see section 251(b) of Pub. L. 96–223, set out as an

note under section 193 of this title.

of 1978 Amendment Pub. L. 95–618, title IV, § 402(e), Nov. 9, 1978, 92 Stat. 3203, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “(1) In general.—The

made by this section [amending this section and section 57, 465, 751, and 1254 of this title] shall apply with respect to wells commenced on or after October 1, 1978, in taxable years ending on or after such date. “(2) Election.—The taxpayer may elect to capitalize or deduct any costs to which section 263(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applies by reason of the

made by this section [amending this section and section 57, 465, 751, and 1254 of this title]. Any such election shall be made before 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 respect to the taxpayer’s first taxable year to which the

made by this section apply and for which he pays or incurs costs to which such section 263(c) applies by reason of the

made by this section. 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.”

of 1976 Amendment Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(vii), Oct. 4, 1976, 90 Stat. 1817, provided that: “The

made by this subparagraph [amending this section and section 6011, 6611, and 6651 of this title and repealing section 6076 and 6680 of this title] shall apply with respect 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 amended, set out as an

note under section 190 of this title.

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) [amending this section] shall apply to taxable years ending after December 31, 1970. “(3) The

made by subsection (c) [amending this section] shall apply to taxable years beginning after December 31, 1969.”

of 1969 Amendment Pub. L. 91–172, title VII, § 706(b), Dec. 30, 1969, 83 Stat. 674, provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after December 31, 1969.”

of 1965 Amendment Pub. L. 89–243, § 4(p)(3), Oct. 9, 1965, 79 Stat. 965, provided that: “The

made by this subsection [amending this section] shall apply to taxable years ending after September 2, 1964.” Pub. L. 89–243, § 4(q), Oct. 9, 1965, 79 Stat. 965, provided in part that: “Except as otherwise specifically provided in this section and in the

made by this section [amending this section and section 4912, 4914, 4916, 4917, 4919, 4920, and 4931 of this title], such

shall apply with respect to acquisitions of stock and debt obligations made after February 10, 1965.”

of 1962 Amendment Pub. L. 87–834, § 21(d), Oct. 16, 1962, 76 Stat. 1064, provided that: “The

made by this section [enacting section 182 of this title and amending this section] shall apply with respect to taxable years beginning after December 31, 1962.”

of 1960 AmendmentAmendment by Pub. L. 86–779 applicable to taxable years beginning after Dec. 31, 1959, see section 6(d) of Pub. L. 86–779, set out as an

note under section 180 of this title.

of 1965 Amendment Pub. L. 89–243, § 1(a), Oct. 9, 1965, 79 Stat. 954, provided that: “This Act [amending this section and section 4912, 4914, 4916, 4917, 4919, 4920, and 4931 of this title, and enacting provisions set out as notes under section 6011 and 6076 of this title] may be cited as the ‘Interest Equalization Tax Extension Act of 1965’.”

of 1964 Amendment Pub. L. 88–563, § 1(a), Sept. 2, 1964, 78 Stat. 809, provided that: “This Act [enacting sections 4911 to 4920, 4931, 6076, 6680, 6681, and 7241 of this title, amending this section and section 1232, 6011, and 6103 of this title, and enacting provisions set out as notes under section 6011 of this title] may be cited as the ‘Interest Equalization Tax Act’.”

For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title. Applicability of Certain

by Pub. L. 99–514 in Relation to Treaty Obligations of United StatesFor applicability of amendment by section 701(e)(4)(D) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, with provision that for such purposes any amendment by title I of Pub. L. 100–647 be treated as if it had been included in the provision of Pub. L. 99–514 to which such amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100–647, set out as a note under section 861 of this title. Plan

Not Required Until January 1, 1989For provisions directing that if any

made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.