Bonus depreciation.

• Author: Laffie, Leslie S.
• Position: Regulations

New temporary regulations (TD 9091) on the depreciation of certain modified accelerated cost recovery system property and computer software provide detailed guidance on the additional first-year "bonus" depreciation allowed by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and other recent legislation. Secs. 168(k) and 1400L(b) permit taxpayers to deduct additional 30% or 50% first-year depreciation for certain property.

In addition to setting forth the requirements for depreciable property to qualify for the first-year bonus depreciation deduction, the regulations instruct taxpayers on how to determine the deduction and the depreciation otherwise allowable.

Depreciable property must meet four requirements before it will qualify for a 30% or 50% bonus deduction:

1. The property must be of a specified type;

2. The original use of the property must commence with the taxpayer after Sept. 10, 2001 (for 30% property) or after May 5, 2003 (for 50% property);

3. The property must be acquired by the...