Free Tax Course
 

Special Depreciation Allowance

You may be able to take a special depreciation allowance (in addition to your regular MACRS (Modified accelerated cost recovery system) depreciation deduction) for qualified property placed in service during the tax year.

What is the special depreciation allowance?

The allowance is:

30% for qualifying Liberty Zone property or

50% for:

Gulf Opportunity Zone (GO Zone) property and

qualified cellulosic biomass ethanol plant property only.

 

What special depreciation allowance can I choose?

You can elect the 30% special allowance if qualified for 50% or elect not to deduct any special allowances for all property in each class placed in service during the year by attaching a statement to the return.

 

Who are eligible for the special depreciation allowance?

The special depreciation allowance was previously available for all taxpayers for new qualifying property placed in service after September 10, 2001 and before January 1, 2005

  • 30% special allowance for property placed in service by may 5, 2003 and
  • 50% for property placed in service after May 5, 2003 until January 1, 2005)

for use in their trade or business or for the production of income.

You figure the special depreciation allowance before you figure your regular MACRS deduction.


 Free-Tax-Course

 

Looking for more IRS Deductions?