It usually takes a long time—39 years, to be exact—to recoup the full cost of a business building through depreciation deductions. But there’s a way to secure faster tax benefits.
Strategy: Separate building components for tax purposes. As long as you meet certain requirements, you may write off the cost of some building components in only five or seven years. And your business doesn’t have to apply to the IRS for a change in its accounting method.
Best of all, the components may qualify for “bonus depreciation” under the latest tax rules. The new 2010 Tax Relief Act authorizes 100% bonus depreciation for qualified property placed in service in 2011.
The percentage will be cut in half to 50% for qualified property placed in service in 2012 (see box below).
Instead of a taking five or seven years to deduct the cost of components, you might write off the entire cost in just one year!
That’s not to say that the IRS gives taxpay...(register to read more)