Tax Reform Series 23 – Bonus Depreciation

Plain Language of Changes:

  • Qualified property acquired after September 27, 2017 is eligible for 100% bonus depreciation
  • This limit is phased out as follows:
    • 80% if placed in service in 2023
    • 60% if placed in service in 2024
    • 40% if placed in service in 2025
    • 20% if placed in service in 2026
    • 0% thereafter
  • Written contract before September 27, 2017 makes asset ineligible for new bonus depreciation limit
  • Taxpayer may elect to use 50% bonus instead of 100% for the first tax year ending after September 27, 2017
  • Qualified improvement property is eligible for bonus depreciation
  • Exclusion for property of rate regulated utilities, certain motor vehicle, boat & farm machinery businesses that use floor financing indebtedness
  • Bonus depreciation allowed on used property placed in service after September 27, 2017
  • Allowed for film & television productions and live theatrical productions
  • $8,000 allowed on passenger automobiles
  • Bonus not considered for cost allocation under percentage of completion

Detailed Analysis of Bonus Depreciation

Cordasco & Company PC is a boutique CPA firm specializing in federal and state tax issues. We provide customized tax and accounting services specifically designed to help our clients capitalize on the rapidly changing tax and accounting environments.

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