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Depreciation
Bonus Depreciation
July 18, 2011
In general terms, Bonus Depreciation may allow aircraft owners to realize the depreciation benefits of an eligible asset more quickly. Aircraft owners are not entitled to more depreciation, but are allowed to obtain the benefits of depreciation more quickly. When available, Bonus Depreciation can be utilized by owners of many capital assets and is not an aviation specific benefit.
The Small Business Act of 2010 contained provisions that extended Bonus Depreciation through the end of 2010. Under the Act, 50% of the cost of Bonus Depreciation eligible property may be deducted in the year the property is acquired. The remaining 50% of the cost or “basis” remains eligible for depreciation in future years according to normal depreciation rules.
Congress has also passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 – which would allow businesses 100-percent accelerated, or "bonus" depreciation of investments in capital assets, including new aircraft, through December 31, 2011, retroactive from September 8, 2010. The legislation also provides for "bonus" depreciation allowance of 50 percent during 2012. This legislation is awaiting the President's signature.
Related Resources
- Bonus Depreciation: New Revenue Procedure Expands Planning Opportunities (July 18, 2011) by Victor Charles Anvick, ATIS Group LLC
- Congress Approves Expanded Tax Benefits For Business Aircraft Purchase (December 17, 2010)
- Bonus Depreciation Reintroduced for New Aircraft Purchasers (September 2010) by Ed Kammerer, Hinckley Allen & Snyder LLP
- Bonus Depreciation: Deduction at the State Level (March 2004)
- Depreciating Corporate Aircraft (June 2001) by Troy A. Rolf, Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C.
