Bonus Depreciation on Facility Upgrades


By Steven Barber

Did you know that Congress recently expanded its definition of qualified property to which bonus depreciation can be applied?  Starting in 2016, an improvement to an interior portion of an existing building may qualify for bonus depreciation.

Whether a facility upgrade is being imposed by your manufacturer or you just want a fresh look for your dealership, start planning now.  Let me give you an incentive to expedite the process… The bonus depreciation that we have become accustomed to using is set to be reduced in 2018 and then terminate at the end of 2019.

Bonus depreciation is an incentive to accelerate the expensing of your capital expenditures. It has been around since September 11, 2001 and is set to fully expire December 31, 2019. The current incentive allows you to expense 50% of the cost of your eligible capital expenditures through the end of 2017, 40% through the end of 2018, and 30% through the end of 2019.  After that… it is gone!

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