Priddy & Holifield PA CPA

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Additional 50% First-Year Depreciation Bonus Depreciation – There is allowed an additional first-year depreciation deduction equal to 50 percent of the adjusted basis of qualified property, and it applies for AMT purposes. Qualified property includes most types of new property other than buildings placed in service after December 31, 2008, and before January 1, 2010.
The 50% additional depreciation allowance applies to qualified property unless the taxpayer “elects out.” The election out may be made for any class of property for any tax year, and if made applies to all property in that class placed in service during that tax year.
Qualified Property includes property to which MACRS applies with a recovery period of 20 years or less, qualified leasehold improvement property, and other specific categories. The original use of the property must commence with the taxpayer. Arkansas does not recognize bonus depreciation.
Sec 179 – Expensing
The expensing amount increases to $250,000 and $800,000 for taxable years beginning in 2008. The applicable period now is for taxable years beginning in 2008 and 2009.
Expensing is increased to $250,000 and the investment ceiling limit is $800,000. For 2009, a taxpayer’s expensing election is phased out completely under the investment ceiling limit only when its investment in qualified expensing-eligible property reaches $1,050,000. Arkansas’ Sec 179 limit is $112,000.