2009 Depreciation Options Table for First-Year Asset Tax Write-offs from Brookwood Tax Service

This page last updated on
February 6, 2010

Sample Depreciation Options Table
First-Year Write-Off Options Under 2009 Extended Depreciation Rules

This table outlines just four possible first-year write-off totals for $400,000 of new business assets with an IRS recovery period of 5 years, using combinations of:

	Section 179, first-year "expensing" of up to $250,000;
	"Bonus" Depreciation of 50% of the asset cost;
	"Regular" MACRS first-year depreciation, typically 20% of asset cost for a five-year life asset;
	Straight Line first-year depreciation, which is 10% of asset cost for a five-year life asset.

SOME AVAILABLE FIRST-YEAR WRITE-OFF OPTIONS
TYPE OF WRITE-OFF	MAXIMUM WRITE-OFF	MEDIUM WRITE-OFF	"REGULAR" WRITE-OFF	LOWEST WRITE-OFF
Section 179 Expense Deduction	$250,000	$150,000	None	None
50% "Bonus" Depreciation	$75,000	None	None	None
"Regular" MACRS Depreciation	$15,000	$50,000	$80,000	None
Straight Line Depreciation	None	None	None	$40,000
TOTAL FIRST YEAR WRITE-OFF	$340,000	$200,000	$80,000	$40,000

If choosing to use both Section 179 and "regular" MACRS, take the write-offs in the order listed above. In other words, subtract the Section 179 expense deduction from the asset cost first, then calculate the "regular" depreciation on the remaining basis amount.

In the MEDIUM WRITE-OFF example, selecting a Section 179 expense write-off of $150,000 reduces the $400,000 original basis to $250,000. Then calculate the "regular" MACRS first-year depreciation by taking 20% of $250,000, which equals $50,000.

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Sample Depreciation Options Table First-Year Write-Off Options Under 2009 Extended Depreciation Rules

SOME AVAILABLE FIRST-YEAR WRITE-OFF OPTIONS

Sample Depreciation Options Table
First-Year Write-Off Options Under 2009 Extended Depreciation Rules