The United States House of Representatives passed legislation (“H.R. 4718”) on July 11, 2014 to permanently extend bonus depreciation. Bonus depreciation allowed businesses to deduct an additional first-year depreciation deduction equal to 50 percent of the cost of qualified property placed in service before December 31, 2013. H.R. 4718 would make the 50-percent bonus depreciation deduction permanent and expand the definition of qualified property to not only include property eligible for bonus depreciation under the expired law but also include qualified retail improvement property and tree or vine bearing fruit or nuts. Furthermore, H.R. 4718 would (a) adjust for inflation the bonus depreciation limits for passenger automobiles subject to the luxury auto limits and (b) extend the provision that expired for taxable years beginning after December 31, 2013 to permit taxpayers to claim a portion of unused alternative minimum tax credits in lieu of bonus depreciation.
H.R. 4718 now goes to the United States Senate.