Bonus Depreciation
In addition to the Section 179 first-year expense deduction
described above, the tax code currently authorizes another special
depreciation allowance in the first year qualifying property is placed
in service - bonus depreciation. You may be able to take a special
depreciation allowance of 50 percent of the cost of the property placed
in service in 2014. It can be taken in addition to, or in place of,
the Section 179 expense deduction. More importantly, the bonus depreciation
is available through 2014 on most depreciable property with an asset
life of 20 years or less.
With the Section 179 expense deduction
and bonus depreciation allowance, you can substantially reduce your
taxable income in 2014. However, claiming these deductions will also
reduce the basis of your property against which your regular depreciation
deductions will be calculated.
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