2017 Form IL-4562, Special Depreciation-2025

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What qualifies for bonus depreciation? Modified Accelerated Cost Recovery System (MACRS) property with a recovery period of 20 years or less. Depreciable computer software. Water utility property. Qualified leasehold improvement property, like any improvement to the interior portion of a nonresidential building.
The rules allowed Bonus Depreciation to 100% for all qualified purchases made between September 27, 2017 and January 1, 2023. Bonus Depreciation ramped down to 80% in 2023, and will be reduced to 60% for 2024.
The special depreciation allowance for certain qualified property (other than certain long production period property and certain aircraft) placed in service after December 31, 2023, and before January 1, 2025, is limited to 60% of the depreciable basis of the property.
Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, certain qualified property acquired before September 28, 2017, certain qualified property acquired after September 27, 2017, and certain plants bearing fruits and nuts by the applicable percentage.
Key differences Bonus depreciation has no annual limit on the deduction. Section 179 offers greater flexibility. Under Section 179, businesses can deduct any dollar amount of their choosing within the thresholds and can allocate the deduction among assets ing to preference.
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To calculate the bonus depreciation, you need to multiply the bonus depreciation rate which is prevailing in the market by the cost of the business asset. Then, deduct the tax of the property from the cost of the asset.
To calculate depreciation using the straight-line method, subtract the assets salvage value (what you expect it to be worth at the end of its useful life) from its cost. The result is the depreciable basis or the amount that can be depreciated. Divide this amount by the number of years in the assets useful lifespan.
168(k), Special Allowance for Certain Property. The adjusted basis of the qualified property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year.

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