The Economic Stimuls Act of 2008
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Provides Significant Tax Benefits to Buyers of Roll Forming Machinery
Tax Benefits to Business
For assets acquired and put into service in 2008, business owners can elect to expense up to $250,000 (increased from $128,000) of qualifying property instead of taking depreciation, under Section 179.
The $250,000 maximum amount that can be expensed is reduced dollar-for-dollar, if qualifying property in excess of $800,000 (increased from $510,000) is placed in service in a taxable year beginning in 2008. For taxable years beginning in 2009 and thereafter, the prior limitation amounts continue to apply.
Bonus Depreciation
An additional benefit of the act is that now businesses are allowed a 50% bonus depreciation on tangible property with a recovery period not exceeding 20 years. This includes roll forming machinery.
Example
Here is an example of how these new tax benefits can be calculated:
Additional Resources
Contact a sales rep regarding this product
Contact a sales rep regarding this product
Provides Significant Tax Benefits to Buyers of Roll Forming Machinery
Tax Benefits to Business
For assets acquired and put into service in 2008, business owners can elect to expense up to $250,000 (increased from $128,000) of qualifying property instead of taking depreciation, under Section 179.
The $250,000 maximum amount that can be expensed is reduced dollar-for-dollar, if qualifying property in excess of $800,000 (increased from $510,000) is placed in service in a taxable year beginning in 2008. For taxable years beginning in 2009 and thereafter, the prior limitation amounts continue to apply.
Bonus Depreciation
An additional benefit of the act is that now businesses are allowed a 50% bonus depreciation on tangible property with a recovery period not exceeding 20 years. This includes roll forming machinery.
Example
Here is an example of how these new tax benefits can be calculated:
- $500,000 of roll forming equipment is acquired and placed into service in 2008
- $250,000 may be expensed under Section 179
- $250,000 remains to be depreciated
- A further $125,000 may be expensed as Bonus Depreciation (50% of $250,000)
- Asset now has a $125,000 base from which to take the standard 1st year depreciation
- For this example, we will assume a 7-year property depreciation= $17,857 1st year depreciation
- Total deduction in 2008 is $392,857 on the asset
- The remaining $107,143 cost of asset is recovered under the otherwise applicable rules for computing depreciation
Additional Resources
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