Qualified Reuse and Recycling Property
Qualified Reuse and Recycling Property will be the discussion point for this post on bonus depreciation. In just over a week, the 2010 New Year will be here and it will be time for us all to make our new years resolutions. For many people, that may be exercising more, making the world a better place, spending more time at home, and saving money. Interestingly, many businesses will also have some similar New Years resolutions including being more profitable, being more environmentally conservative, and reducing expenses. With that in mind, why not take a look at something that can help your business with all three of those resolutions?
source: cityofsouthfield.com
Businesses are allowed to take a special allowance on depreciation for qualified reuse and recycling property. If you are asking yourself what this means, you are in the right place and will find the information below. Also below, you will find the guidelines for taking advantage of that special bonus depreciation.
Qualified Reuse and Recycling Property:
1. Is allowed a 50% Bonus Depreciation that may be claimed on the adjusted basis of Qualified Reuse and Recycling Property acquired and placed in service after 8/31/08. The original use of the property must begin with the taxpayer after 8/31/08 and the property must be new.
2. Is Defined as:
- A) Machinery and equipment (not building, real estate, rolling stock or equipment to transport reuse and recyclable materials) that is used exclusively to collect, distribute or recycle qualified reuse and recyclable materials. Machinery and equipment includes the software necessary to operate the equipment.
- B) Qualified reuse and recyclable materials are: scrap plastic, glass, textiles, rubber, packaging, metal, fiber and electronic scrap.
- C) The term “recycle” and “recycling” means the process by which worn or superfluous materials are processed into materials for use in manufacturing consumer and commercial products, including packaging.
- D) “Electronic scrap” which includes cathode ray tubes, flat panel screens or similar video display devices with screen sizes greater than 4 inches diagonally and central processing units.
3. Must have original use with taxpayer beginning after 8/31/31. Property must be acquired after 8/31/08. If a written contract to purchase, it must be entered into after 8/31/08
4. Purchased is as defined in Code Sec. 179(d)(2).
5. Qualified reuse and recycling property must have a useful life of at least 5 years. This is not the assigned recovery period for this asset.
As you can see, committing to conducting business in a more environmentally safe manner, and finding ways to also save money through the allowable bonus depreciation can be a great new years resolution. Should you have any questions on this, please do not hesitate to ask us below or on the questions page. We wish you and your business the best in the upcoming New Year, and hope this information can be of help.