Bonus Depreciation Is Back (Again)

President Obama has signed into law a measure that includes a "bonus" depreciation provision covering factory-new aircraft purchases. The measure, which passed both houses of Congress in early September, garnered strong support from the National Business Aviation Association.

Bonus depreciation was first introduced in 2002 in an act that allowed many buyers of factory-new aircraft to take 30-percent more tax depreciation in year one than would normally be allowed. Then, in 2003, Congress extended the benefit period through 2004 and increased the bonus depreciation amount to 50 percent. Bonus depreciation returned for aircraft purchased in 2008 and is now available for models bought this year.

Note that "bonus" doesn't mean you can deduct more dollars overall. Instead, it means you can take more of your deduction in the first year rather than over the normal depreciation schedule.