Depreciation Bonus Information Clearinghouse
- Try the 2011 Depreciation Bonus Calculator HERE
- View the 2011 AED Depreciation Bonus brochure HERE. You can also customize this handy brochure with your company logo. Order your customized brochure now.
- Read "Temporary law can mean HUGE tax savings for 2011 equipment buyers," an article written by AED Vice President of Government Affairs Christian A. Klein HERE
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NEWS ALERT: On December 13, 2011, the House passed the "Middle Class Tax Relief & Job Creation Act of 2011" (H.R. 3630), which included an extension of 100 percent bonus depreciation bonus through the end of 2012. Additionally, the bill included the two "fixes" requested in our October ad hoc coalition letter (viz., holding the depreciation bonus harmless from percentage of completion and allowing companies to claim AMT credits in lieu of bonus depreciation).
Unfortunately, the provisions extending 100 percent depreciation bonus through 2012 didn't make it into the final compromise payroll tax holiday bill at the end of 2011. However, an ad hoc coalition of associations and companies continue to urge Congress to extend 100 percent depreciation bonus through 2012. Please let your lawmakers know that 100 percent depreciation bonus for 2012 is important to you! Stay tuned for further updates.
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NEWS ALERT: On Nov. 15, two bills related to depreciation bonus extension were introduced in the Senate. Sen. Richard Lugar's (R-IN) legislation (S. 1873) would extend 100 percent bonus depreciation and increased Sec. 179 levels for one year. Sens. Chris Coons (D-DE) and Marco Rubio's (R-FL) AGREE Act (S. 1866) would extend the capital investment incentives and includes other job creation proposals.
In other news, Reps. Sam Johnson (R-TX) and Richard Neal (D-MA) recently introduced a bipartisan, technical correction bill (H.R. 3366) to resolve the percentage of completion issue that has limited the efficacy of the depreciation bonus in certain industries. And Rep. Pat Tiberi (R-OH) last month introduced H.R. 3123, a bipartisan proposal to allow companies to use more corporate AMT credits for activities that would otherwise qualify for bonus depreciation.
On October 12, 2011, in a letter to House and Senate leadership, 77 national and state associations called on Congress to extend 100 percent bonus depreciation and higher small business expensing allowances for at least one year.
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On Dec. 17, 2010, President Obama signed legislation that would extend and expand the depreciation bonus through 2012.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides 100 percent depreciation bonus for capital investments placed in service after September 8, 2010 through December 31, 2011. For equipment placed in service after December 31, 2011 and through December 31, 2012, the bill provides for 50 percent depreciation bonus. Note: The Small Business Jobs Act of 2010, which contained 50 percent depreciation bonus, still applies to purchases made between January 1, 2010 through September 7, 2010.
The new law also extends Sec. 179 expensing for taxable years beginning in 2012. In 2012, a taxpayer may expense up to $125,000 of the cost of qualifying property placed in service for the year (phase-out threshold of $500,000), indexed for inflation. Note: The Small Business Jobs Act, which increased Sec. 179 expensing levels to $500,000 (phase-out threshold amount is $2 million) for the taxable years beginning in 2010 and 2011, still applies.
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Depreciation Bonus At A Glance
- The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides 100 percent depreciation bonus for capital investments placed in service after September 8, 2010 through December 31, 2011. For equipment placed in service after December 31, 2011 and through December 31, 2012, the bill provides for 50 percent depreciation bonus.
- However, The Small Business Jobs Act of 2010, which contained 50 percent depreciation bonus, still applies to purchases made between January 1, 2010 through September 7, 2010.
- Depreciation bonus helps businesses that cut their tax bill buy new equipment.
- Applies, among other things, to purchases of tangible personal property (including construction, mining, forestry, and agricultural equipment) with a MACRS recovery period of 20 years or less
- Applies to new equipment only
- Allowed for both regular and alternative minimum tax purposes
- Discretionary - Taxpayer need not claim the depreciation bonus
Sec. 179 Expensing At A Glance
- The Small Business Jobs Act increased Sec. 179 expensing levels to $500,000 for 2010 and 2011
- The phase-out threshold amount is $2 million
- The new tax cut extension law also extends Sec. 179 expensing for taxable years beginning in 2012, at $125,000 and $500,000 respectively, indexed for inflation.
- New and used equipment is eligible for expensing
- Can be combined with depreciation bonus
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Keep checking our DepreciationBonus.org Web site for more information.
Please note that the information on this site is provided by the Associated Equipment Distributors as a public service to equipment purchasers. It should not be construed as tax advice or as a promise of potential tax savings or reduced tax liability.
For more information about the depreciation bonus, contact your tax professional or visit the Internal Revenue Service website.
Administrative Offices
600 Hunter Drive, Suite 220
Oak Brook, IL 60523
Phone: 630-574-0650
Fax: 630-574-0132
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Washington Headquarters
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Suite 900 - South Building
Washington, DC 20004
Phone: 800-388-0650 |
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