Treasury and IRS Issue Guidance on the Additional Bonus Depreciation Allowance

The Treasury Department and the Internal Revenue Service have issued temporary regulations providing detailed rules on the additional first-year or "bonus" depreciation allowance.

As a result of recent amendments to the Internal Revenue Code, taxpayers may deduct an additional 30- or 50-percent first-year depreciation allowance for certain depreciable property. This depreciation allowance is in addition to the amount of depreciation otherwise allowable in the first year.

In general, the regulations provide the requirements that must be met for depreciable property to qualify for the additional first-year depreciation deduction. Further, the regulations instruct taxpayers how to calculate the additional first-year depreciation deduction and the amount of depreciation otherwise allowable for the property.

The regulations are effective for property that is acquired by a taxpayer after September 10, 2001 (for purposes of the additional 30-percent first-year depreciation allowance), or acquired after May 5, 2003 (for purposes of the additional 50-percent first-year depreciation allowance), and placed in service before January 1, 2005 (or, in the case of certain property, placed in service before January 1, 2006.) The regulations are also effective for New York Liberty Zone property that is acquired by a taxpayer after September 10, 2001, and placed in service before January 1, 2007 (or, in the case of certain real property, placed in service before January 1, 2010.)

You may like these other stories...

Bank Leumi said to face $300 million demand in tax caseDavid Voreacos and Greg Farrell of Bloomberg reported on Wednesday that New York’s banking regulator will ask for more than $300 million to settle an investigation...
Mike "the Situation" Sorrentino, one of the stars on the former TV show "Jersey Shore," is in the middle of…well, a tax situation.On October 23, the erstwhile reality show attraction was arraigned...
Deal to lock in US tax cuts is bubbling up on the HillSome US lawmakers are exploring a post-election deal that would lock in permanent tax cuts for major corporations and low-income families, Richard Rubin of Bloomberg...

Already a member? log in here.

Upcoming CPE Webinars

Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?
Nov 20Kristen Rampe will share how to uncover new opportunities with your clients by asking powerful questions.