Additional first-year depreciation allows for extra depreciation allowances in the acquisition year of specific business properties, as mandated by federal income tax laws. This incentivizes the acquisition of certain types of business property. It is periodically updated by Congress, with varying limits, rates, and qualifying property.
Bonus depreciation refers to an additional deduction that allows businesses to depreciate a larger portion of the cost of qualifying property in the first year it is placed in service. This is in addition to Section 179 expensing and the standard first-year depreciation.
First-Year Depreciation allows property owners to take a larger depreciation deduction in the first year than what is typically provided under regular depreciation schedules, thereby accelerating tax benefits.
Qualified Leasehold Improvement Property (QLIP) refers to improvements made to an interior portion of nonresidential real property by a lessor or lessee under a lease, which may be eligible for certain depreciation benefits.
Section 179 of the Internal Revenue Code allows businesses to immediately deduct the cost of qualifying equipment, rather than capitalizing and depreciating the asset over a long period. This is particularly beneficial for small businesses, enabling them to reduce their tax liability quickly.
