IRS Unveils Bonus Depreciation Guidance Giving 2010 Election Flexibility

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IRS unveils eagerly awaited guidance on two pieces of legislation that provided taxpayers generous bonus depreciation incentives, offering flexibility for taxpayers caught in difficulties over whether to take 50 percent depreciation, an additional 100 percent depreciation available in some cases, or neither. In Revenue Procedure 2011-26, IRS offers guidance under the Small Business Jobs Act of 2010 and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The two laws extend the time that taxpayers already could take 50 percent bonus depreciation and add additional 100 percent bonus depreciation in some cases. Under the guidance, taxpayers can elect to take 50 percent depreciation for an entire year that includes a key date of Sept. 9, 2010, if they are having difficulties sorting out which property might qualify for which type of depreciation before and after that date.