The Tax Equity and Fiscal Responsibility Act of 1982 stipulates that taxpayers must apply one of two options to property which qualifies for the investment tax credit and is purchased after December 31, 1982. These options, according to the author's terminology, are:R, reduce the investment tax credit applied by 2% (e.g., from 10% to 8%); orU, leave the credit unreduced but subtract half the investment tax credit in determining the asset's depreciable basis. In this study the author examines the circumstances under which a particular option is advantageous to the taxpayer.