Increased Bonus Depreciation

  • The TCJA provides for full and immediate expensing of 100% of qualified property from 9/27/17-12/31/2022.

  • This can be taken on new or used property. In the past, only new property qualified. This will be important when your client purchases an existing business.

  • This applies to machinery, equipment, computers, etc. Qualified leasehold improvements do not qualify.

Increased IRC 179 Expensing

  • The limitation has been increased from $510,000 to $1,000,000 and the phase-out has been raised to $2.5 million.

  • The TCJA expands the definition of qualified real property eligible for IRC 179 to include any of the following improvements to nonresidential property placed in service after the date of the underlying property was first place in service: roofs, heating ventilation, air conditioning, fire protection, and alarms/security systems.

  • California did not adopt the new rules. The limitation is $25,000 and the phase-out is $200,000.