Good News.
Bonus first year depreciation is brought back to life.
Several months late, (but who’s counting?) … the House removed the expiration date on Bonus first year depreciation. … Which had expired at the end of last year. … And now has not expired after all. This was a wonderful provision allowing companies to deduct half (50%) the acquisition cost … Which we can now continue deducting. (or some other percentage) (the percentage changes from time to time).
To some of you, this is ho-hum. But this is great news to our equipment intensive clients. The loss of section 179 and bonus first year depreciation was a heavy blow to them. For some of them, this meant the loss of half a million dollars in deductions. This will help ease the blow.
We often used bonus first year depreciation in lieu of section 179 which had issues we’d rather not deal with. Section 179 is not revived, but could be at any moment. Silly me, I actually took them serious when they said they wouldn’t reinstate either of them. Half that twin has been brought back to life. Can the other twin be far behind?
Section 179 and bonus first year depreciation have both been with us … off and on … for fifty years. Every few decade or so, they kill it, wait a year or so and then bring it back, usually with a new name. Everyone knew this stuff could come back. What is most surprising this time is, they didn’t wait very long.
Take it away, wait for the elections, and give it back just before the elections. First they hook us on this stuff, then they take it away. I’m told crack dealers work the same way.
But … good news … it’s back. But not section 179.
From Bloomberg …
bizztrategy @ Ellis CPA 