Bonus depreciation extension for certain aircraft (excluding the transportation industry).

AuthorRohrs, Jane

Prior to the American Jobs Creation Act of 2004 (AJCA), a special rule under Sec. 168 limited the amount of costs eligible for additional first-year depreciation, for property eligible for the extended placed-in-service date (i.e., certain property with a recovery, period of 10 years or longer and certain transportation property,). Only progress expenditures properly attributable to the costs incurred before 2005, were eligible for the additional first-year depreciation.

New Law

AJCA Section 336 extends the bonus depreciation provisions for certain noncommercial aircraft placed in service prior to 2006. To qualify for this provision, the aircraft must:

* Be acquired during the applicable period under Sec. 168(k)(2)(A);

* Satisfy the placed-in-service requirements;

* Not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes);

* Be purchased (as defined in Sec. 179(d)(2)) by a purchaser, who at the time of the contract t-or purchase, has made a nonrefundable deposit of the lesser of 10% of the cost or $100,000; and

* Have an...

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