State Conformity to Federal Bonus Depreciation 2025

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The document is California Form 3885A for the taxable year 2023, which is used to report depreciation and amortization adjustments. It includes sections for identifying passive or nonpassive activities, electing to expense certain tangible property under IRC Section 179, and calculating California depreciation and amortization deductions. The form requires details about the property or costs involved, including dates placed in service, California basis, methods, and total deductions.

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Click ‘Get Form’ to open it in the editor.
Begin by entering your name(s) and SSN or ITIN as shown on your tax return at the top of the form.
In Part I, identify whether the activity is passive or nonpassive by checking the appropriate box.
For Part II, enter the amount from line 12 of the Tangible Property Expense Worksheet in the designated field.
In Part III, list each property placed in service. Fill out columns (a) through (f) with details such as description, date placed in service, California basis for depreciation, method, life or rate, and California depreciation deduction.
Complete lines 4 through 8 by adding amounts as instructed to calculate total California depreciation and compare it with federal amounts.
Proceed to Part IV for amortization. Enter descriptions and dates for costs that require amortization and complete columns (c) through (f).
Finally, sum up total California amortization on line 12 and compare it with federal figures on line 13.

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Who is not eligible for bonus depreciation?

Eligibility rules Useful life: To qualify for bonus depreciation, the asset must have a useful life of 20 years or less. For example, a building wouldnt be eligible for bonus depreciation, but a vehicle or piece of equipment would be.

Is it better to take Section 179 or bonus depreciation?

Bonus depreciation can reduce your taxable income below zero, but Section 179 cannot: If you want to reduce taxable income below zero, bonus depreciation is your only option.

What qualifies for 100% bonus depreciation in 2025?

IMPORTANT: To qualify for 100% bonus depreciation, property must be acquired after January 19, 2025. Property acquired under a binding written contract dated before this cutoff is not eligible for the new rule and remains subject to the previous phase-out schedule.

What is federal bonus depreciation?

Bonus depreciation is a tax incentive that allows businesses to immediately deduct the cost of qualifying assets, such as equipment, instead of over time. This strategy can reduce a companys income tax, which in turn reduces its tax liability.

What assets are eligible for 100% bonus depreciation?

What qualifies for bonus depreciation? Any Modified Accelerated Cost Recovery System (MACRS) property with a recovery period of 20 years or less. A depreciable computer software. Water utility property. Qualified improvement property, like any improvement to the interior portion of a nonresidential building.

2023 3885a

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How to calculate federal bonus depreciation?

The amount of bonus depreciation available on qualified property is generally equal to the product of the applicable bonus rate and the original cost of the property, reduced by any applicable percentage of certain tax credits claimed with respect to the property and any section 179 allowance.

Does AZ conform to bonus depreciation?

Arizona requires an addback of federal bonus depreciation deductions taken under IRC Sec. 168(k). The amount of any depreciation allowed under IRC Sec.

Does CT follow federal bonus depreciation?

Yes, Connecticut requires an addback for the IRC Sec. 168(k) federal bonus depreciation deduction effective for tax years beginning on or after January 1, 2017.