Property that does not qualify for an immediate tax write-off under Section 179 may qualify for an increased first-year depreciation deduction under bonus depreciation rules. Unlike the Section 179 deduction, there are no restrictions on the amount of qualifying property and there is no taxable income limit. This deduction is equal to 100 percent of the cost of qualifying property purchased and placed in service by December 31, 2011. Unless Congress acts to extend the 100% bonus depreciation rules, they will be available at 50% for 2012.
To qualify for bonus depreciation, the property must be new personal property, purchased software, or qualified leasehold improvement property. Used property does not qualify.