Bonus Depreciation Examples

A. Non-residential Real Property (Recovery Period: 39 Years)

Hotels, Office Buildings, Stores, Warehouses, Manufacturing Plant Buildings

Assumptions: Basis of $10,000,000; Placed in service in June 2006

Assumptions: Basis of $10,000,000; Placed in service in June 2006; and segregation study results in 30% of basis qualifying for treatment as other than real property at an average depreciation allowance equal to an 8-year straight-line calculation(1)

1 The 8-year estimate is used to simplify the illustration. It reflects an assumed average of the annual deductions allowed under 5-year MACRS property, 7-year MACRS property and 15-year MACRS property, etc. The actual mix of property in a project could differ substantially from this illustration.

B. 5-Year MACRS Property (150% DDB Method)

Automobiles, Trailers, Construction Equipment, Restaurant Fixtures

Assumptions: Basis of $100,000; Placed in Service in June 2006

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