Q. Are bonus depreciation deductions reduced for business property placed in service in the last quarter of 2011? J.M., Lansing, Mich.
A. No. The restriction on last-quarter deductions doesn’t apply to property that qualifies for the 100% bonusin 2011. But regular deductions for other property (e.g., used property) may be reduced if the cost of property placed in service in the last quarter of the year exceeds 40% of the cost of all property placed in service during the year (not counting real estate).
Tip: This tax trap may be avoided by electingtreatment for qualified property. The cost is removed from the last-quarter calculation.