What is qualified property for Bonus Depreciation?
(4 Points)
Property placed in service and disposed in the same year
Property required to be depreciated under ADS
Farm property held by a business electing out of interest expense limitations in IRC Sec 163(j)
Depreciable property with a useful life of 20 years or less
Qualified property for Bonus Depreciation includes:
1. Property placed in service and disposed of in the same year: This refers to property that is both acquired and disposed of within the same tax year.
2. Property required to be depreciated under ADS: ADS stands for Alternative Depreciation System, which is a method of determining the depreciation of certain types of property as mandated by the tax code. Qualified property for Bonus Depreciation includes assets that are required to be depreciated under ADS.
3. Farm property held by a business electing out of interest expense limitations in IRC Sec 163(j): This refers to agricultural property owned by a business that chooses to opt-out of the interest expense limitations outlined in the Internal Revenue Code (IRC) Section 163(j).
4. Depreciable property with a useful life of 20 years or less: This includes any property that is eligible for depreciation and has a useful life of 20 years or less.