Returning Value Blog

Summary

A highlight of the Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) is the five-year extension of additional first-year depreciation, or “bonus depreciation,” from 2015 through 2019.  Enacted on December 18, 2015, the “PATH Act” retroactively extended 50-percent bonus depreciation to apply to qualified property placed in service in 2015.  The enactment came too late for some fiscal year taxpayers that had already filed federal tax returns for tax years beginning in 2014 and ending in 2015, and for taxpayers with a taxable year of less than 12 months beginning and ending in 2015.  Consequently, these taxpayers may have failed to claim bonus depreciation on their tax returns for qualifying property placed in service in 2015.  Recently, the Internal Revenue Service issued relief guidance in Rev. Proc. 2016-48 to provide affected taxpayers with procedures for claiming, or not claiming, the 50-percent bonus depreciation on such property.