The maximumallowed under the tax law is currently only $25,000 for tax years beginning in 2015.
Strategy: Beware of a special tax trap for property placed in service in the last quarter of the year.
This last-quarter trap results from the way depreciation deductions are calculated under the Modified Accelerated Cost Recovery System (MACRS). It can apply if you’ve exceeded theor property doesn’t otherwise qualify under .
Here’s the whole story: MACRS treats most property placed in service at any time during the year as being placed in service on July 1 under the “midyear convention.” Therefore, your business can effectively benefit from a half-year’s worth of depreciation, even for property that is placed in service late in the year.
However, if the property placed in service during the last quarter exceeds 40% of the cost of all depreciable assets for the year—excluding...(register to read more)