Special Depreciation Allowance

This special allowance is a deduction equal to 30%, 50% or 100% of the depreciable basis of the qualified property. You figure the amount of the special depreciation allowance after any section 179 deduction you choose to claim, but before figuring your regular depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS).

The 100% special depreciation allowance applies to qualified property acquired after September 8, 2010 and placed in service before January 1, 2012.

     To qualify for this allowance the following requirements must be meet:

• It is new property.
• The Property type is:
• MACRS property with a life of 20 years or less.
• Water Utility property.
• Computer software that is not type 197.
• Qualified leasehold improvement.

For 2008 a special 50% depreciation allowance was re-enacted.

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