Update on Bonus Depreciation

The “Fiscal Cliff” deal extends beneficial key cost recovery provisions. Bonus depreciation, which was set to expire December 31, 2012, was extended to qualified properties acquired and placed in service prior to January 1, 2014. The additional deduction is equal to 50% of the acquired value of the qualifying property. The law also extended the definition of qualified 179 property to include qualified leasehold improvement property, restaurant property and retail improvement property. It also applies to most types of tangible personal property and computer software. Qualifying property is MACRS property with a recovery period of 20 years or less.