The Small Business Jobs Act of 2010 (H.R. 5297) was signed into law on September 27, 2010. With the understanding that for small businesses to be able to expand, they need both tax cuts and greater access to loans, the Act creates new and expanded tax incentives and a $30 billion loan fund. The Act includes both tax incentives and revenue raisers to pay for them. This article describes the bonus depreciation provisions that directly affect fixed assets management.

50% Bonus Depreciation Modifications:

Extension: Bonus depreciation is extended for one year, for property placed in service in 2010 (and certain long production period property and transportation property placed in service in 2011).

Percentage of completion: Bonus depreciation on assets with a recovery period of seven years or less is to be disregarded when computing the percentage-of-completion for long-term contracts. In other words, the cost of qualified property taken into account as a cost allocated to the contract is to be done as if bonus depreciation had not been claimed but rather MACRS had been applied to its entire depreciable basis.

Click here for full article!