The Material Handling Industry of America’s Executive VP Hal Vandiver has released a guide to the The American Recovery and Reinvestment Act of 2009 and the impact it may have for purchasers of capital equipment like racks, conveyors, shelving, safety and automation equipment.
The act includes a couple of nice items for purchasers of new equipment in 2009:
- 1-year extensions of 50% bonus depreciation and enhanced Sec. 179 small business expensing. The boost to $250,000 in Section 179 expensing is extended for new and used equipment purchases made and placed in service in 2009. The amount decreases to $128,000 in 2010. The cap on how much equipment can be purchased to enjoy the write-off remains at $800,000 in 2009. In 2010, that amount drops to $510,000. The one-year 50% bonus depreciation means you can write off in 2009 an extra 50% of the cost of your new equipment that you buy and start using in 2009.
- A 5-year Net Operating Loss carry back provision for small businesses: Under the one-year extension, small businesses (whose total equipment purchases in 2009 don’t exceed $800,000) can also expense the first $250,000 for the 2009 tax year (until 1/1/2010). The 50% bonus depreciation can then be taken on the remaining basis of the machine, if it is new.
The MHIA article has some excellent information on the exact way you can apply these incentives, and is worth the short read. Track how the stimulus money is being spent at www.recovery.gov.