John Napoli, co-chair of Seyfarth's Tax practice, will be presenting the Strafford webinar, "Depreciation and Expensing: New Rules and Limits Under Current Tax Law," on July 24, 2018 from 1:00 PM - 2:50 PM EDT.
The new tax law includes favorable changes for taxpayers for recovering costs of capital expenses for business purposes. Changes to certain depreciation and expensing rules lowered the cost of acquiring capital assets, providing tax benefits and planning opportunities to businesses.
The new expensing and cost recovery changes the analysis for cost recovery in determining the appropriate tax treatment for tangible property expenditures. Before tax reform, taxpayers could deduct 50% of the cost of tangible personal property placed in service during the tax year followed and apply accelerated depreciation to the remaining 50% of the cost.
Now, taxpayers may take 100% bonus depreciation on qualified property acquired and placed in service after Sept. 27, 2017, subject to a phase-out beginning in the year 2023. The definition of “qualified property” has also been expanded to include used assets subject to specific limitations.
The expansion of IRC §179 increases the maximum amount a taxpayer may expense up to $1 million and increases the threshold amount to $2.5 million, expanding the availability of IRC §179 to more taxpayers. IRC §179 property now includes specific depreciable tangible personal property, and the definition of “qualified property” for IRC §179 purposes now covers some improvements made to nonresidential real property as well. Tax professionals and advisers must be knowledgeable of the requirements and nuances of the new depreciation and expensing rules to properly advise and develop tax saving techniques for taxpayers.
The panel will provide a detailed analysis of the new rules for depreciation and expensing and provides planning considerations for tax professionals and advisers.
Key issues discussed will include:
Application of the depreciation and expensing rules under current tax law
Bonus depreciation challenges and limitations
IRC §179 expansion and deduction requirements
Determining “qualified property” bonus depreciation and IRC §179 purposes
Limitations on personal use property
Understanding the recovery periods for real property and considerations for electing out of interest expense deduction limitations
Comparing bonus depreciation and IRC §179 in deductions and factors regarding NOL limitations
Planning methods to ensure tax savings for taxpayers