Depreciation

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of2010 focused mainly on personal income and estate tax. Nevertheless, some additional provisions may be helpful to businesses. In particular, the new law enhances the Section 168(k) bonus depreciation provisions by temporarily allowing 100% first~year bonus depreciation of new business equipment that qualifies for bonus depreciation. That is, a company that purchases qualifying depreciable assets may deduct the entire cost of the assets right away. First~year deductions will immediately boost a company’s cash flow, compared with taking depreciation deductions over several years. No limits exist on the amount of qualifying equipment purchased that is eligible for the 100% deduction. This 100% deduction provision is effective for qualifying equipment placed in