Bonus Depreciation for Higher 2013 Tax Rates

***Update***

Fiscal Cliff deal extends bonus depreciation and retroactively enhances expensing election for 2012 and into 2013

 

 

 

By Scott Battle

50% Bonus Depreciation may be available for new Diamonds contracted for purchase in 2012 and delivered in 2013*.

*Requirements include a binding contract in place before the end of 2012, along with a 10% deposit, and the aircraft must be used primarily for business.

Here’s an example of potential 2013 depreciation for a new Diamond DA42 NG-VI costing $899,000:

First-year Income Tax Deduction in 2013 = $539,400. This includes 50% Bonus Depreciation and 20% for the first-year of MACRS.

$539,400 equals 60% of the $899,000 aircraft cost for a tax savings of $188,790, based on a 35% income tax bracket.  Should the top income tax rate rise to 39.6% with the failure to extend the current tax rates, the tax savings available becomes $213,602.

Don’t wait – legal, accounting, and financing work cannot be done overnight.

Please contact Scott Battle at Advocate Consulting Legal Group, PLLC to discuss how you can take advantage of Bonus Depreciation in 2013… !

Call (888) 325-1942 or email scottb@advocatetax.com.