A Depreciation Bonus

A Depreciation Bonus

August 21, 2014 | By Keith Martin in Washington, DC

A depreciation bonus may be extended.

Companies putting new equipment in service in the United States have been allowed off and on since 2001 to deduct a fraction of the cost or “basis” immediately. The remaining basis is deducted over time as regular depreciation. This “depreciation bonus” was 50% when it expired at the end of 2013 for most renewable energy projects. It remains available through 2014 for equipment at conventional power plants.

The House voted in July to make the bonus permanent.

The Senate tax-writing committee voted in April to extend it for another two years. Congress is expected to make decisions about a long list of “tax extenders” in late November or December.

by Keith Martin