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500K Section 179, extended bonus depreciation enacted

September 28, 2010

The President yesterday signed HR 5297 into law. Some kep provisions:

- $500,000 Section 179 depreciation limit for years beginning in 2010 and 2011.

- 50% bonus depreciation has been extended for assets placed in service through December of this year.

- The built-in-gain recognition period for S corporations has been reduced to five years for 2011 recognition events.

- AMT offset for business credits. General business credits arising this year will offset alternative minimum tax, not just regular tax.

- Rental owners will have to start issuing 1099-MISCs to their service providers who they pay $600 or more in a year, starting next year.

- For this year only, self-employed taxpayers can deduct their health insurance in computing self-employment tax.

More details here. Additional coverage:

TaxProf Blog
Roger McEowen
Kay Bell
Paul Neiffer

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1. 50% bonus depreciation?
ex. I buy a truck for $25k biz use only and I can deduct the $25k plus take a 50% bonus deduction on top?

Great summary of HR 5297


Andy - it's one or the other - you can either take Sec. 179 for a property or bonus depreciation for the same basis. You can't do both for the same basis.

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