Q. Our company bought used equipment for $35,000 in 2014. Can we depreciate it all? J.G., Pittsburgh
A. Yes. Generally, you may write off the cost of used equipment under the Modified Accelerated Cost Recovery System (MACRS), based on its useful life. But new legislation signed Dec. 19, 2014, revived the enhancedfor 2014, so the entire cost can potentially be written off in just one year. This is usually preferable to taking depreciation deductions under MACRS over a period of time. The maximum deduction for tax years beginning in 2014 is $500,000, but you cannot claim a 179 deduction that would create an overall tax loss for the year.
Tip: The new law also extended 50% first-year bonus depreciation to cover eligible assets placed in service during calendar year 2014, but that break is only allowed for new, not used, equipment.