Energy Tax Law Alert: Bonus Depreciation Extended Through 2010
9/27/2010

Today the President signed into law the Small Business Jobs Act of 2010, which extends first-year bonus depreciation deductions to projects placed in service in 2010, including projects placed in service before the legislation was passed.

Under the bonus depreciation rule, an owner of qualifying property is entitled to deduct 50% of the adjusted basis of the property in 2010. The remaining 50% of the adjusted basis of the property is depreciated over the applicable tax depreciation schedule. Coupled with short-term MACRS depreciation deductions (e.g., five years), bonus depreciation can cause a project to generate significant tax losses in the early years that can be extremely valuable, particularly if the owner or investor can use the losses to offset other sources of taxable income.

Please contact one of the attorneys listed below if you have questions about bonus depreciation, or if you have questions relating to renewable energy project finance or related tax issues.

Chris Heuer at (503) 294-9206 or ckheuer@stoel.com
Greg Jenner at (612) 373-8857 or gfjenner@stoel.com
Adam Kobos at (503) 294-9246 or ackobos@stoel.com
Carl Lewis at (206) 386-7688 or cslewis@stoel.com
Kevin Pearson at (503) 294-9622 or ktpearson@stoel.com

IRS Circular 230 notice: Any tax advice contained herein was not intended or written to be used, and cannot be used, by you or any other person (i) in promoting, marketing or recommending any transaction, plan or arrangement or (ii) for the purpose of avoiding penalties that may be imposed under federal tax law.