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Bonus Depreciation May Be Back For 2012

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It appears 100-percent bonus depreciation may make a comeback for at least one more year when the smoke clears on the payroll tax deduction controversy. The House version of H.R. 3630 (PDF) contains language restoring the tax measure that allows moneymaking businesses to write off the full value of equipment expenses, including airplanes, in a single tax year. Otherwise, the maximum write-off is 50 percent. Although the language made it through the House and was presented to the Senate, politics of the day dictated that a stripped-down version (PDF) of the bill dealing mainly with the payroll tax cut and Keystone pipeline be sent forth. The House rejected the Senate's revisions on Sunday and the political crisis continues. However, Daniel Cheung, of Aviation Tax Consultants, told AVweb in a podcast interview he expects the bonus depreciation language to be back when the pre-holiday wrangling is over.

Cheung said he doesn't think a change in the current administration's generally bad attitude toward private aviation had anything to do with the measure's sudden and unexpected reappearance. He said bonus depreciation will provide much-needed economic stimulus across all sectors and aviation will just be one of the industries to benefit. He said he does not expect aviation to be singled out for exemption from the benefit. Meanwhile, he said, the presumed end of 100-percent depreciation on Dec. 31 has resulted in a noticeable uptick in interest in new aircraft. Cheung said that despite the generally poor economy, many companies are doing well and can use the write-off a new airplane will give them.

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