Finance
As part of the American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009, there is a significant tax deduction available in the form of bonus depreciation. The bonus depreciation is equal to 50% of the adjusted basis of qualified property placed in service before January 1, 2010. Eligible property includes most property with a recovery period of less than 20 years, computer software, and qualified leasehold improvements. To put it simply, there is an additional 50% deduction, in addition to the regular depreciation deduction, for equipment placed in service during 2009. The item does not actually have to be paid for during 2009, but the contract to purchase or purchase order has to be issued/signed during 2009 and the item actually placed in service during 2009. In addition, the item must be new (not used).
For example, if the business purchased a new C-Arm for $130,000 during 2009 they would get an additional tax depreciation deduction of 50%, or $65,000. Combined with the normal tax depreciation deduction, the total depreciation deduction in the first year is 60%, or $78,000.
We have no way of knowing if the bonus depreciation deduction will get extended into 2010. If you are contemplating purchasing equipment in early 2010, you should strongly consider moving up the purchase into 2009 if possible to take advantage of the bonus depreciation.
Written by Jim Morse, vice president of Finance, Nueterra Healthcare