Bonus
Depreciation:
Fixed Asset Management
2011 Bonus Depreciation and AMT Depreciation Relief
50% bonus depreciation is for qualifying personal property fixed assets placed in service after January 1, 2010 and before September 8th, 2010.
100% bonus depreciation is for qualifying property that is:
Placed in service and acquired after September 8, 2010 and before January 1, 2012
Purchased after September 8, 2010 and before January 1, 2012
Qualified AIRCRAFT or Long-Production-Period placed in service before January 1, 2013
In addition to extending the eligibility period for bonus depreciation on fixed assets, the extension of the placed-in-service deadline also extends the eligibility period for obtaining exemption from the AMT depreciation adjustment.
For 2012, bonus depreciation reverts back to 50 percent and it is the last year bonus depreciation is available.
15-Year MACRS Depreciation
The 15-year recovery period has been extended and retroactive for both 2010 and 2011. Assets that qualify: Qualified leasehold improvements, Qualified retail improvements, and Qualified restaurant improvement property has been extended retroactively for 2010 through 2011.
IRS Reference for 50% bonus and new Section 179 deductions.
Bonus Depreciation for 2010 Fixed Assets
Obama passed the extension on Bonus Depreciation and Sec. 179 for 2010 assets on Sept. 27th, 2010. This means, that assets (personal property) purchased between Dec. 31, 2009 and September 8, 2010 qualify for accelerated bonus depreciation and for those that are eligible for Sec. 179 can combine the savings!
Recent economic stimulus for Sec. 179: SBJA increased the expensing limits of the Internal revenue Code for any taxable year beginning in 2010 and 2011. For both tax years, companies can expense up to $500,000 as long as your total purchased in either year do not exceed the $2 million limit. Each dollar over, the expensing amount correspondingly drops by one dollar. Companies that spend more than $2.5 million on tangible personal property cannon tax advantage of Sec. 179 – however, you can still benefit from the Bonus Depreciation for 2010.
If you are using Sage FAS Asset Accounting v2010.1, you CAN currently use the bonus switch. Sage was already pro-active (shout out to Sage – I know ERP systems won’t handle this!) and wrote in bonus for 2010 assets with a WARNING that the extension was pending. You can still use the Bonus Switch for all PERSONAL property placed-in-service between Dec. 31, 2009 and Sept. 8, 2010. Once you turn on the switch, you just click OK on all the warnings that will appear.
As for the new provisions on Sec. 179, for now, you will need to sit tight and that update (along with taking the warnings out of the switch/system) will be out in the next version release of v2011.1 – sketch for mid-January 2011. ONLY current Sage FAS SupportPlus members and new licensed users will receive the latest and greatest. Packed full of all these great Tax advantages!
BLOG ARTICLE: Fixed assets bonus qualification chart.
Fixed Asset Management Products
