Section 179 Expensing for Fixed Asset Purchases

• The 2009 limit is $250,000 in depreciation expense write-off for fixed asset purchases, limited to $800,000 of total tangible personal property asset additions.  
• Property can be new or used
• This applies to tangible personal property (examples computers, software (non-customized or off the shelf type) furniture, equipment, automobiles (subject to luxury auto limitations)).
• Limitation: The 179 deduction is limited to taxable income.
• Benefit:  Allows taxpayers an election to expense, rather than capitalize and depreciate.

50% Bonus Depreciation Extended

• 50% federal bonus depreciation expense write-off on the cost of certain assets purchased before January 1, 2010. 
• Applies to new asset purchases of tangible personal property (examples computers, software, furniture, equipment, automobiles (subject to luxury auto limitations)).
• Must be "new" property and excludes real property (buildings or land).
• Includes qualified leasehold improvement property

Qualified Leasehold Improvements - 15 Year
Depreciation Life

• Improvements pursuant to a lease, building must be in service more than 3 years, and improvements must be to the interior of building. 
• Applies to non-residential real property and the lease cannot be between related parties.
• Excludes elevator, enlargement of building, or structural improvements.

• Autos - $10,960
• Light trucks, vans, and SUVs - $11,060
• Heavy trucks, vans, or SUV with GVW exceeds 6,000 lbs. there is a $25,000 maximum expense election
  
  
  

Net Operating Loss Carry Back Rules Expanded
The net operating loss (“NOL”) 5-Year carry back election is expanded to include large businesses under the Worker, Homeownership, and Business Assistance Act of 2009 passed on November 6, 2009. This provides an opportunity to obtain a cash refund with your C corporate income tax filing on Form 1139 for federal taxes paid in prior years. A partnership, S Corporation, or trust's federal taxable loss flows thru to the owner's individual tax return with potential to be carried back on Form 1045, depending on the owner's tax basis of the investment.

Large Business Taxpayers NOL Carry Back Rules

• Opportunity for large taxpayers to carry back a taxable loss 3, 4, or 5-years, instead of the traditional 2-year carry back option.
• The due date for making election is by the filing of the tax return (including extensions) of the 2009 tax return.
• Applies to tax years ending after December 31, 2007 thru years beginning before January 1, 2010 (i.e. 2008 or 2009 year filings).
• Limitations:
• 1-year benefit for 2008 OR 2009 taxable year, not both
• The loss carried back to the 5th year is limited to 50% of taxable income of that prior year

Small Business Taxpayers NOL Carry Back Rules

• Taxpayers who previously made an election on their 2008 tax return to carry back loss 5-years, if incur a loss in 2009 can still elect the 5-year carry back on the 2009 tax return for remaining unused losses.
• Small taxpayer is defined as having 3-year average annual gross receipts less than $15M.
• The loss carry back to the 5th year does not have a limitation.
• The due date for making election is by the filing of the tax return (including extensions) of the 2009 tax return.
  
  
  

Domestic Production Activities Deduction

• Limitation:  The deduction cannot exceed 50 percent of W-2 wages allocable to domestic gross receipts.
• For 2010, the deduction will increase to 9%.

Energy Efficient Commercial Buildings Deduction

• A deduction is available for certain energy efficiency improvements installed before January 1, 2014 on, or in, a depreciable building located in the United States.
• This deduction applies to property installed as part of a building’s interior lighting systems, heating, cooling, ventilation, and hot water systems; or envelope, and is part of a certified plan to reduce total annual energy and power costs of these systems by at least 50 percent as compared to building minimum standards.

(Standard 90.1-2001 of the Illuminating Engineering Society of North America and American Society of Heating, Refrigerating, and Air Conditioning Engineers)

• The deduction is limited to $1.80 times the total square footage of the building.