Section 701.59.18. Depreciation of speculative shell buildings.

       59.18(1) For tax years beginning on or after July 1, 1992, speculative shell buildings constructed or reconstructed after that date may be depreciated as 15-year property under the accelerated cost of recovery system of the Internal Revenue Code. If the taxpayer has deducted depreciation on the speculative shell building on the taxpayer’s federal income tax return, that amount of depreciation must be added to federal taxable income in order to deduct depreciation under this rule.

       59.18(2) On sale or other disposition of the speculative shell building, the taxpayer must report on the taxpayer’s Iowa corporation income tax return the same gain or loss reported on the taxpayer’s federal corporation income tax return. If, while owned by the taxpayer, the building is converted from a speculative shell building to another use, the taxpayer must deduct the same amount of depreciation on the taxpayer’s Iowa tax return as is deducted on the taxpayer’s federal tax return.

       59.18(3) For the purposes of this rule, the term “speculative shell building” means a building as defined in Iowa Code section 427.1, subsection (27)“c.”

This rule is intended to implement Iowa Code sections 422.35 and 422.63.