You have less than four months to take advantage of the 100% Bonus Depreciation Provision.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) allows taxpayers who acquire and place in service new equipment and certain other assets before January 1, 2012 to deduct 100 percent of the cost. This is available instead of depreciating assets using more common tax depreciation methods. You have less than 4 months to take advantage of this immediate tax saving opportunity.

This bonus depreciation opportunity is available for various types of assets and only new assets such as:

1. Computers, office equipment, furniture and fixtures, and others with tax depreciation periods of 20 years or less

2. Computer software

3. Water utility property

4. Leasehold improvements made to interior parts of nonresidential buildings under a lease agreement. Please note the improvements need to be placed in service more than 3 years after the date the building was first placed in service, and they do not include the enlargement of a building, nor improvements made to elevator, escalator, any structural component benefiting a common area, and internal structural framework of a building.

Please note the assets must be acquired and placed in service before January 1, 2012. According to Rev. Proc. 2011-26, assets are considered acquired when it is paid for by a cash basis taxpayer. In the case of an accrual basis taxpayer, it is when the cost of assets is incurred. In addition taxpayers needs to actually placed the asset in service.

You may elect out of this opportunity and depreciate the assets the current tax law instead. This may be appropriate if future deductions may provide more tax savings for a taxpayer who is expected to be in a higher tax bracket in the future years. Also, a taxpayer with an expiring net operating loss from prior years may prefer fewer deductions this year in order to utilize the net operating loss before it expires.

As your tax and business advisors, we want to make sure you are aware of the planning opportunities currently available. Please feel free to contact any of our tax professionals with regarding this or any other tax issue.