Salinas Valley Enterprise Zone |
Business Expense DeductionThe Business Expense Deduction (sometimes referred to as the “accelerated depreciation” benefit) allows the business to treat 40% of the cost of “Qualified Property” as a business expense, rather than a capital expense. In other words, when a capital good (such as a chair) is purchased, rather than depreciating it normally, the business may elect to treat 40% of the cost of the good as a business expense rather than a capital expense, allowing for the deduction for that amount to be taken immediately. Depreciation of the remaining 60% of its value would begin the following year and would be calculated normally. The Business Expense Deduction may only be used for the year the property is first placed into service. The maximum aggregate cost of the property for which the Business Expense Deduction may be claimed in any taxable year is limited as follows:
For the purposes of the Business Expense Deduction, “Qualified Property” includes any property that is Internal Revenue Code (IRC) Section 1245 property. This includes, but is not limited to, tangible personal property (excluding buildings) and most equipment and furnishings acquired by purchase after the Enterprise Zone received its designation for exclusive use within the Enterprise Zone. Office supplies and other small non-depreciable items are not included. Contact UsFor additional information on our firm and how we can assist you, please click here to contact us. We respond promptly to all inquires and look forward to hearing from you! |
