Tax Incentive Information

For assets placed in service during calendar year 2008, 50% of the asset cost not already deducted under Section 179 is available as a first-year bonus depreciation write-off, regardless of the amount of assets placed in service. The rules for this write-off are the same as the bonus depreciation rules that were effective in 2001. The key here is that the item placed in service must be original use property, in other words, used items are not allowed the bonus amount.

Assets subject to a binding written contract for purchase as of 1-1-08 don't qualify, nor does real estate (property with a life of greater than 20 years doesn't count). Bonus depreciation is based on the date the asset is put into service, and not based on the tax year end, so fiscal year taxpayers can take advantage of this on current purchases.

Under the Epact of 2005, you can take accelerated depreciation and expense the whole cost, with installation, in the year you implement the lights! so, it is even better than the older 50% route as shown above.

See the document below as it gives the highlights of the program. Basically the customer can take .50 cents per square foot up to the total cost of the project, whichever is less and expense that amount in the tax year they installed the lights. It is pretty powerful. The program has been extended until the end of tax year 2008 and is expected to be extended and even enhanced for coming years.