New Depreciation Rules
New assets placed in service after 9/8/2010 and through 12/31/2011 qualify for 100% bonus depreciation. Assets placed in service in 2012 qualify for 50% bonus depreciation.
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Purchase Date
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1/1/2009-9/8/2010
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9/9/2010-12/31/2011
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1/1/2012-12/31/2012
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Rate
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50%
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100%
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50%
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Bonus depreciation may be claimed on qualified leasehold improvement acquired from 9/9/2010 through 12/31/2011 at 100%, and for 2012 it again qualifies at 50%. Restaurants & retail property do not qualify for bonus depreciation unless they also meet the qualified leasehold improvements definition. The special 15 year depreciation life for leasehold improvements, retail and restaurant property was extended through 12/31/2011.
Bonus depreciation is not limited by income. Only related party purchases, retail, restaurant and foreign assets are excluded from bonus depreciation. Note that this change also allows 100% bonus depreciation for heavy SUV’s and pickups with a GVW over 6,000 pounds. For cars first put into service in 2011, the maximum amount of depreciation that can be taken is $11,060; $11,160 for trucks and vans. If the business use of the vehicle is less than 100%, these limits are reduced.
Section 179 for 2011 is a maximum of $500,000 with a phase out limit of $2,000,000. (If you purchase more than $2,000,000 in Section 179 assets, the amount of Section 179 depreciation that can be taken is reduced by the amount the assets purchased exceeds the phase out limit.) Section 179 will decrease to $125,000 for 2012 with a $500,000 phase out limit. In 2013 Section 179 drops to $25,000 with a $200,000 phase out ceiling.