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In a building construction project, the building (including its structural components) is not eligible for bonus depreciation, because buildings generally have a MACRS recovery period of greater than 20 years.
Bonus depreciation in a nutshell The TCJA expanded the deduction to 100% in the year qualified property is placed in service through 2022, with the amount dropping each subsequent year by 20%, until bonus depreciation sunsets in 2027, unless Congress acts to extend it.
While this may be true for federal purposes, it is not true for New York State tax purposes. NY State tax can actually increase as additional bonus depreciation is claimed.Beware of Bonus Depreciation in NY State for Real Estate Investors. ItemFederalNY StateAdjusted Gross Income - Post-Bonus Depreciation Adjustment(524,000)39,476,0007 more rows Jun 1, 2021
In a building construction project, the building (including its structural components) is not eligible for bonus depreciation, because buildings generally have a MACRS recovery period of greater than 20 years.
New York and NYC do not conform to federal 168(k) bonus depreciation with the exception of Liberty zone property.
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Among remaining states, California historically has not conformed to federal depreciation rules; Nevada, Washington and Wyoming do not have corporate or personal income taxes. Only a small number of states have enacted legislation to conform to the federal change.
Internal Revenue Code Section 168(k) allows an additional first-year depreciation deduction equal to the applicable percentage of the adjusted basis of qualifying property placed in service during the tax year.
The bonus depreciation rules also changed under the TCJA. Prior to the new law, bonus depreciation was 50% of qualified property.States that have adopted the new bonus depreciation rules: Alabama. Alaska. Colorado. Delaware. Illinois. Kansas. Louisiana. Michigan.
The new law increases the bonus depreciation percentage from 50 percent to 100 percent for qualified property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023.
Bonus Depreciation and Section 179 Expensing The Section 179 expense limitation is limited to $25,000. However, the Section 179 expense deduction is not allowed for SUVs over 6,000 pounds, except for eligible farmers.

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