Deadline to Elect Out of 100% Depreciation Nears

The deadline for taxpayers to elect out of 100-percent depreciation is fast approaching.

100% Depreciation Opt-Out Election for Businesses

Business taxpayers have until October 15, 2018, to make the election to opt out on a timely filed extended return if they:

  1. placed qualifying property in service during 2017,
  2. did not claim the new 100% depreciation deduction, and
  3. got an extension to file their 2017 tax returns.

Making the Election on an Amended Return

Also, taxpayers need to file an amended return to the election by October 15, 2018, if:

  1. they already filed their 2017 return,
  2. did not elect out of 100% depreciation,
  3. want to make the election now.

How to Electing Out of Bonus Depreciation

Taxpayers who elect out of the 100% depreciation deduction, as well as the 50% deduction available under prior law, must do so by attaching a statement to a timely filed return. More details can be found in:

  • NPRM REG-104397-18,
  • IRS Publication 946, How to Depreciate Property, and
  • Form 4562, Depreciation and Amortization.

100% Depreciation

The new 100% depreciation deduction allows businesses to write off most depreciable business assets in the year they are placed in service. Further, since the deduction is retroactive and applies to qualifying property acquired and placed in service after September 27, 2017. Therefore, it may affect many 2017 tax returns.


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All stories by: CCHTaxGroup