New Section 168(k) Bonus Depreciation Regulations: Claiming 100% First-Year Depreciation Deduction Under Tax Reform

Determining Qualified Property, Impact of Phase-Outs, Calculating Deduction

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, October 30, 2018

Recorded event now available

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Program Materials

This webinar will provide tax advisers and compliance professionals with a thorough and practical guide to the new IRS proposed regulations on the increased bonus depreciation for new and used property. The panel will outline the bonus depreciation provisions and phaseouts, detail depreciation calculation methods, and discuss how to apply to individual taxpayers and disregarded entities.

Description

On Aug. 8, 2018, the IRS issued proposed regulations offering guidance on increased initial year depreciation deductions under Section 168(k). The new provision, contained in the 2017 tax reform law, allows businesses to immediately deduct 100% of the cost of qualified property in the first year the property is placed in service. The proposed regs provide tax advisers with a roadmap to the enhanced bonus depreciation rules.

Tax reform significantly changed the bonus depreciation rules, allowing full first-year expensing of qualified property through the year 2022, with scheduled phase-outs over the following four years. The law also expands the types of qualified property by removing the requirement that only new property would qualify for bonus depreciation and allows specific property, such as films, television and theatrical productions, to claim the 100% depreciation treatment over an extended period.

The proposed regulations detail the statutory requirements for determining whether a property is “qualified” for purposes of claiming the Section 168(k) deduction, and offers instruction on determining the additional bonus deduction. The regs spell out four criteria for depreciable property to be deductible as qualified property, including the specific types of property, the original use rules, the timing for acquisition and placement into service. Tax advisers need to understand how the regs change prior treatment to avoid losing valuable tax benefits.

Listen as our experienced panel provides a thorough and practical exploration of Section 168(k) bonus depreciation provisions after the recent regulatory guidance.

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Outline

  1. Tax reform law Section 168(k) bonus depreciation provisions
  2. Proposed regulations REG-104397-18
  3. Expansion of 100% first-year bonus depreciation to depreciable property previously used by another taxpayer
  4. Rules for determining qualified property
  5. Calculating the depreciation deduction
  6. Planning opportunities and risks

Benefits

The panel will discuss these and other priority topics:

  • What are the new rules for determining whether depreciable property qualifies for the 100% first-year depreciation deduction under Section 168(k)?
  • How do the proposed regs address calculation of both bonus and other allowable depreciation for qualified property?
  • How do the phase-outs of the 100% bonus depreciation application work?
  • Grandfathering first-year 100% depreciation deduction for property placed into service in 2017 for calendar year taxpayers

Faculty

McGuire, David
David McGuire

Director
McGuire Sponsel

Mr. McGuire's client work concentrates on depreciation law, fixed assets and cost segregation. Before founding the...  |  Read More

Meyette, Edward
Edward Meyette
Partner
Crowe Horwath

Mr. Meyette leads the firm's Tax Accounting Methods Practice and works with large and middle-market companies...  |  Read More

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