Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. Extension and modification of bonus depreciation. Here’s an example of how the rule works. Your business portion would be $200.
Using bonus depreciation, you can deduct a certain percentage of the cost of an asset in the first year it was purchase and the remaining cost can be deducted over several years using regular depreciation or Section 1expensing. Eligible property placed in service between Jan.
The acquisition date for property acquired pursuant to a written binding contract is the date of such contract. Full bonus depreciation is phased down by percent each year for property placed in service after Dec. This allows contractors to apply a percent bonus depreciation to any equipment bought during a fiscal year. Bonus depreciation : Under the bonus depreciation rules, an extra depreciation deduction is allowed for qualifying property in the first year it is placed in service. Passenger automobiles qualify for bonus depreciation if they are new vehicles that are used more than for business and the taxpayer did not elect out of bonus depreciation.