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Bonus Depreciation

Posted by Mike C Posted on Aug 13 2013

An expanding and strengthening economy may mean that Dec. 31, 2013 will be the end of the line for some stimulus-type tax breaks. Unless Congress acts, additional depreciation deductions under Code Sec. 168(k) in the placed-in-service year equal to 50% of the adjusted basis of qualified property (often referred to as bonus depreciation) generally won't be available for property placed in service after this year. Also slated for disappearance is the 15-year writeoff and special expensing allowance for qualified leasehold improvement property, retail improvements, and restaurant property. Finally, the overall Code Sec. 179 expensing limit is set to plummet to $25,000 for property placed in service next year. Thus, enterprises planning to purchase machinery and equipment or invest in eligible real estate assets during the remainder of this year or early the next should try to accelerate their buying plans, if doing so makes sound business sense.

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