Question

which of the following is permitted to claim bonus depreciation?

A. ESTATES

B TRUSTS

C BENEFICIARIES

D NONE

Answer 1

Option C BENEFICIARIES is correct answer.

Feedback: The Beneficiaries are allowed to claim bonus depreciation for assets received from a decedent thereby providing income tax savings to the beneficiaries in the form of reduced gain or increased depreciation.

Bonus depreciation is a method of accelerated depreciation which allows a business to make an additional deduction of 50% of the cost of qualifying property in the year in which it is put into service. This extra depreciation allowance is only for new equipment.

First, you may be able to take a Section 179 deduction, to reduce the purchase price. Then you may be able to take the additional bonus depreciation of 50% of the remaining basis. The balance of the purchase is then depreciated in the usual way.