IRS finalizes regulations for 100 percent bonus depreciation

IR-2020-216, September 21, 2020

WASHINGTON — The Treasury Department and the Internal Revenue Service today released the last set of final regulations PDF implementing the 100% additional first year depreciation deduction that allows businesses to write off the cost of most depreciable business assets in the year they are placed in service by the business.

The 100% additional first year depreciation deduction was created in 2017 by the Tax Cuts and Jobs Act and generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.

The deduction applies to qualifying property (including used property) acquired and placed in service after September 27, 2017. The final regulations provide clarifying guidance on the requirements that must be met for property to qualify for the deduction, including used property.

Additionally, the final regulations provide rules for consolidated groups and rules for components acquired or self-constructed after September 27, 2017, for larger self-constructed property on which production began before September 28, 2017.

For details on claiming the deduction, see the final regulations and the instructions to Form 4562, Depreciation and Amortization (Including Information on Listed Property).

In addition, the Treasury Department and the Internal Revenue Service plan to issue procedural guidance for taxpayers to opt to apply the final regulations in prior taxable years or to rely on the proposed regulations issued in September 2019.

For more information about this and other TCJA provisions, visit IRS.gov/taxreform.

IR Press

Share
Published by
IR Press

Recent Posts

OCC Announces Enforcement Actions for November 2024

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released enforcement actions taken against…

2 hours ago

Treasury Sanctions Gazprombank and Takes Additional Steps to Curtail Russia’s Use of the International Financial System

Treasury imposes sanctions on dozens of Russian banks, securities registrars, and finance officials; OFAC issues…

18 hours ago

Acting Comptroller Testifies on State of the Federal Banking System

WASHINGTON—Acting Comptroller Michael J. Hsu today testified on the state of the federal banking system…

1 day ago

Remarks by Assistant Secretary for International Finance Brent Neiman on the U.S. Cross-Border Payments Agenda

As Prepared for Delivery Thank you very much for the opportunity to be here today, and…

3 days ago

Remarks by Assistant Secretary for Investment Security Paul Rosen at the Third Annual CFIUS Conference

As Prepared for Delivery Good afternoon.  I’d like to start by thanking our panelists today for…

3 days ago