[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.190-1]

[Page 260]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.190-1  Expenditures to remove architectural and transportation 
barriers to the handicapped and elderly.

    (a) In general. Under section 190 of the Internal Revenue Code of 
1954, a taxpayer may elect, in the manner provided in Sec. 1.190-3 of 
this chapter, to deduct certain amounts paid or incurred by him in any 
taxable year beginning after December 31, 1976, and before January 1, 
1980, for qualified architectural and transportation barrier removal 
expenses (as defined in Sec. 1.190-2(b) of this chapter). In the case 
of a partnership, the election shall be made by the partnership. The 
election applies to expenditures paid or incurred during the taxable 
year which (but for the election) are chargeable to capital account.
    (b) Limitation. The maximum deduction for a taxpayer (including an 
affiliated group of corporations filing a consolidated return) for any 
taxable year is $25,000. The $25,000 limitation applies to a partnership 
and to each partner. Expenditures paid or incurred in a taxable year in 
excess of the amount deductible under section 190 for such taxable year 
are capital expenditures and are adjustments to basis under section 
1016(a). A partner must combine his distributive share of the 
partnership's deductible expenditures (after application of the $25,000 
limitation at the partnership level) with that partner's distributive 
share of deductible expenditures from any other partnership plus that 
partner's own section 190 expenditures, if any (if he makes the election 
with respect to his own expenditures), and apply the partner's $25,000 
limitation to the combined total to determine the aggregate amount 
deductible by that partner. In so doing, the partner may allocate the 
partner's $25,000 limitation among the partner's own section 190 
expenditures and the partner's distributive share of partnership 
deductible expenditures in any manner. If such allocation results in all 
or a portion of the partner's distributive share of a partnership's 
deductible expenditures not being an allowable deduction by the partner, 
the partnership may capitalize such unallowable portion by an 
appropriate adjustment to the basis of the relevant partnership property 
under section 1016. For purposes of adjustments to the basis of 
properties held by a partnership, however, it shall be presumed that 
each partner's distributive share of partnership deductible expenditures 
(after application of the $25,000 limitation at the partnership level) 
was allowable in full to the partner. This presumption can be rebutted 
only by clear and convincing evidence that all or any portion of a 
partner's distributive share of the partnership section 190 deduction 
was not allowable as a deduction to the partner because it exceeded that 
partner's $25,000 limitation as allocated by him. For example, suppose 
for 1978 A's distributive share of the ABC partnership's deductible 
section 190 expenditures (after application of the $25,000 limitation at 
the partnership level) is $15,000. A also made section 190 expenditures 
of $20,000 in 1978 which he elects to deduct. A allocates $10,000 of his 
$25,000 limitation to his distributive share of the ABC expenditures and 
$15,000 to his own expenditures. A may capitalize the excess $5,000 of 
his own expenditures. In addition, if ABC obtains from A evidence which 
meets the requisite burden of proof, it may capitalize the $5,000 of A's 
distributive share which is not allowable as a deduction to A.

[T.D. 7634, 44 FR 43270, July 24, 1979]