Fixed asset spending rises as the end of the year approaches
December 07, 2011
Business spending on fixed assets
increased by 15 percent in the third quarter of 2011, due to pent-up demand and a desire to take advantage of the expiring 100 percent bonus depreciation
write-off and Section 179 allowances, according to IRA.com.
Specifically, purchases of office equipment and furniture, computers and software, commercial structures, company vehicles and tangible personal property used in business all rose in number.
Section 179 allows the deduction of the full purchase price of qualifying equipment purchased or financed during the tax year, and bonus depreciation allows companies to immediately write off 100 percent of an item's cost.
Expense deductions under Section 179 must be $500,000 or less and can be applied to equipment that's new or used, provided it is new to the company. Purchases of more than $500,000 may be eligible for bonus depreciation, but the equipment must be new and normally depreciated over 20 years or less. In order to claim bonus depreciation, the fixed asset
must be in service by January 1.