New tax law lets businesses depreciate their assets 100%

The Tax Reform Act of 2017 made some changes to the depreciation rules for businesses.

Under certain conditions, a business can deduct all of the depreciable assets of in the year that they place the item in service instead of the usual straight line method or other depreciable method.

The 100-percent depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property.

Machinery, equipment, computers, appliances and furniture are included.

This new deduction applies to qualifying property acquired and placed in service after Sept. 27, 2017.

If taxpayers elect out of the 100-percent depreciation deduction for a class of property, then they must do so on a timely filed return. If a return was already timely filed and an election was not made, then the taxpayer may do so within six months from the original filing deadline by filing an amended return before Oct. 15, 2018. (if a calendar year filer)

There are proposed regulations that provide more detail.

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