Which of the following is an incorrect statement regarding Bonus Depreciation? A. Bonus Depreciation is useful to very large businesses spending more than the Section 179 spending limit B. Businesses with a net loss in a given tax year qualify to carry-forward the Bonus Depreciation to a future year C. Bonus Depreciation only covers new equipment D. When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation

Question

Charles

Business

29 September, 07:32

Which of the following is an incorrect statement regarding Bonus Depreciation? A. Bonus Depreciation is useful to very large businesses spending more than the Section 179 spending limit B. Businesses with a net loss in a given tax year qualify to carry-forward the Bonus Depreciation to a future year C. Bonus Depreciation only covers new equipment D. When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation

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Answers (1)

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Patricia Scott · Answer 1

C. Bonus Depreciation only covers new equipment.

Explanation:

Bonus depreciation is the depreciation provided on additional capital investment. This is depreciation for tax base calculation, where any purchase of eligible asset is depreciated extra that means the purchase price is allowed as standard deduction in first year of it's purchase.

There is no such primary condition that the asset shall be new equipment only.

Therefore, incorrect statement is C