Planning Notes International - April 8, 2011 - The Tax Relief Act of 2010: An Overview of Business Incentives


The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “Tax Relief Act”) contains numerous provisions that are intended to incentivize U.S. taxpayers to invest in their businesses and the U.S. economy. Many of these provisions extend through 2011. This summary highlights those provisions and ways in which taxpayers can take advantage of the opportunities presented by this new legislation.

For property placed in service during 2008 and 2009, taxpayers were entitled to additional first-year depreciation on qualified property equal to 50% of the adjusted basis of such property. Qualified property is defined to include the following i) property to which MACRS applies and has a recovery period of 20 years or less; ii) computer software (not covered by Code Section 197); iii) water utility property; or iv) qualified leasehold property. In addition, certain other requirements must be met to constitute qualified property.

The Small Business Jobs Act of 2010 extended first-year bonus depreciation for qualified property placed in service during 2010 (certain long-lived property and transportation property may be placed in service in 2011).

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