The Internal Revenue Service (IRS) recently issued guidance explaining when property is eligible for 100 percent bonus depreciation and providing various elections for taxpayers eligible for bonus depreciation.

In December 2010, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Tax Relief Act) extended the additional first-year depreciation (bonus depreciation) rules through 2012. The bonus depreciation rules, which provide for a 50-percent depreciation deduction in the year qualified property is placed in service, were set to expire at the end of 2010. In addition to extending the availability of bonus depreciation in general, the Tax Relief Act provided for a new 100 percent depreciation deduction for qualified property that is acquired and placed into service by the taxpayer between September 8, 2010, and January 1, 2012.