How can a company best take advantage of the new tax rules?
Plan and project. Taxpayers can control their deduction by electing to expense (or not) under Section 179 and by accepting or electing out of bonus depreciation by class, by entity or altogether. Most people don’t realize that bonus depreciation is mandatory unless you choose to elect out. Effective use of elections can maximize deductions. Be attentive. The timing of asset purchases can impact the availability of Section 179 expensing. If you are going to be buying equipment costing more than $1 million, and you want to maximize your 2008 deductions, think about deferring a portion of the acquisition until 2009. Work with someone who can get you the information you need. Look beyond the general rules. For example, the original use requirement has a special rule that applies to property placed in service in 2008, sold and then leased back within three months. Every rule has an exception and every exception has its own exception. Be flexible. Examine written binding contracts entered in
