100 % SPECIAL ALLOWANCE

[Marie]

In the assets entry part of the 4562, I have an item pop up as a 100% special allowance. Other assets are showing 50%. I thought I heard something about a 100% special allow, but can't seem to find any literature, or I'm not looking in the right place. Why is one 100% and others 50%?

[Kimberly K]

I had one also this morning, and noticed the same. But I did remember that this was just passed.

Temporary Extension of Investment Incentives Extension of bonus depreciation. Under prior law, businesses were allowed to recover the cost of capital expenditures over time according to a depreciation schedule. Congress allowed businesses, beginning January 1, 2008 through December 31, 2009, to take an additional depreciation deduction allowance equal to 50% of the cost of the depreciable

property placed in service in those years. Under the Small Business Jobs Act of 2010, this temporary increase in the depreciation deduction allowance was extended through December 31, 2010. The new law extends and temporarily increases this bonus depreciation provision for investments in new business equipment. For investments placed in service after September 8, 2010 and through December 31, 2011, the new law provides for 100% bonus depreciation. For investments placed in service after December 31, 2011 and through December 31, 2012, the new law provides for 50% bonus depreciation. The new law also allows taxpayers to elect to accelerate some AMT credits in lieu of bonus depreciation for taxable years 2011 and 2012.

[Marie]

Thanks, asset was put into service in December. I had elected out of all bonus deprec, but still the 100% shows up in the program. Just wondered why, appreciate the answer.