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- The Economic Stimulus Act allows additional first-year depreciation of 50 percent of purchase cost.
- Depreciation bonus helps businesses that buy equipment this year cut their 2008 tax bill.
- 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.
- Equipment must be purchased and placed in service in 2008.
- Equipment must be new.
- Not applicable if a binding purchase contract existed prior to Jan. 1, 2008.
- Allowed for both regular and alternative minimum tax purposes.
- Discretionary - Taxpayer need not claim the depreciation bonus.
- Depreciation bonus will expire at end of 2008.
- Expensing limit increases to $250,000.
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