On September 27, 2010, President Obama signed into law the Small Business Jobs Act (H.R. 5297) (the Act ). The Act includes a number of tax incentives for business, such as bonus depreciation, Section 179 expensing and other targeted incentives for small business. The Act also includes several revenue raising provisions with broader application.
Bonus Depreciation and Expensing Provisions
The Act extends 50 percent bonus depreciation under Section 168(k) by one year for qualified property placed in service during 2010 (or 2011 in the case of certain long-lived property, transportation property and aircraft). This provision applies equally to large and small businesses.
In addition, the Act increases the maximum amount a taxpayer may expense under Section 179 from $250,000 to $500,000 for property placed in service during tax years beginning in 2010 and 2011. Similarly, the threshold for the total amount of property placed in service during the tax year where the phase-out of Section 179 expensing begins is increased from $800,000 to $2,000,000. Finally, the provision temporarily expands the types of property that qualify for Section 179 expensing to include certain leasehold improvement property, certain restaurant property and certain retail improvement property.
The Act contains other deduction and expensing provisions that:
Small Business Gain Exclusion and Tax Credit Provisions
The Act also contains targeted small business tax provisions that:
The revenue raising provisions in the Act include:
For more information about the Act or any other matter raised in this Alert, please contact your usual Mayer Brown lawyer or at +1 202 263 3390.
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