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U.S. Enacts Legislation To Assist Manufacturing |
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Written by Philip Buonpastore
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Monday, 17 March 2008 |
As a part of the Economic Stimulus Act of 2008 that was signed into law
on February 13 by President Bush, two provisions provide
significant benefit to manufacturing companies.
The new law nearly doubles the amount of deductible Code Sec. 179
expensing for 2008 to $250,000, and increases the threshold for
reducing the deduction to $800,000. It applies to property purchased
and put into service in the tax year beginning in 2008. This would benefit small businesses that are purchasing equipment.
The Act also provides a temporary bonus depreciation aimed at encouraging
business investment. Property must be eligible for the modified
accelerated cost recovery system, with a depreciation of 20 years or
less, and must be purchased and placed in service during 2008. The new
law provides taxpayers a 50% first year bonus depreciation of the
adjusted basis of the property.
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