2017 Bonus Depreciation Percentage
The 2017 Bonus Depreciation Percentage is 100%.
Effective 2017-01-01Source: 2017 Instructions for Form 4562 (IRS)Verified 2026-08-29
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Special depreciation allowance | 50% | 100% | +50% (+100.0%) |
Who it applies to
Taxpayers who place qualified property in service during the 2017 tax year
What changed this year, and why
For the 2017 tax year, the special depreciation allowance (bonus depreciation) percentage is 100% for certain qualified property.
Common questions
- What is the special depreciation allowance?
- The special depreciation allowance, also called bonus depreciation, is an additional first-year deduction that applies to qualified property. It is taken after any section 179 expense deduction and before regular MACRS depreciation, and applies only for the first year the property is placed in service.
Every amount on this page is a published figure rather than yours. The First-year bonus depreciation on an asset takes the number you enter and works it out against them, showing which published figure it used.
What the percentage is applied to, and what is left afterwards
After you calculate your special depreciation allowance for qualified property, you must reduce the depreciable basis of the property by the allowance amount before calculating your regular MACRS depreciation deduction. The remaining cost after the allowance is used to figure your regular depreciation deduction over the property's recovery period. For example, if you acquire qualified property in 2017 and claim the 100% special depreciation allowance, the depreciable basis is reduced by the full allowance amount, leaving no remaining cost for regular MACRS depreciation. This rule ensures that you do not claim both the special depreciation allowance and regular depreciation on the same portion of the property's cost.
Depreciating the remaining cost. After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4). Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before fig- uring your regular MACRS depreciation deduction.
Publication 946 (2017), How To Depreciate Property (IRS)
Electing out, by class of property
You can elect not to claim the special depreciation allowance for any class of property. The election applies to all property in that class placed in service during the tax year. To make the election, you must attach a statement to your tax return indicating what election you are making and the class of property for which you are making the election. The election must be made separately by each person owning qualified property, such as by each partnership, by the S corporation, or for each member of a consolidated group by the common parent of the group. Generally, you must make the election on a timely filed tax return including extensions for the year in which you place the property in service. Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent.
You can elect, for any class of property, not to deduct any special depreciation allowances for all property in such class placed in service during the tax year. To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election.
Publication 946 (2017), How To Depreciate Property (IRS)
Recapture when you dispose of the property
When you dispose of property for which you claimed a special depreciation allowance, the gain on that disposition is generally recaptured as ordinary income. The recapture amount is limited to the allowance that was previously allowed or allowable. This means you cannot treat the gain as capital gain to the extent of the special depreciation allowance you claimed. The recapture rules apply when you sell, exchange, or otherwise dispose of the property. For the 2017 special depreciation allowance of 100%, the entire cost of the property was deducted as the allowance, so any gain on disposition would be recaptured as ordinary income up to that full amount. The recapture provisions ensure that the benefit of the accelerated depreciation is recovered as ordinary income when the property is disposed of, rather than receiving favorable capital gains treatment on the full gain.
When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposi- tion is generally recaptured (included in income) as ordi- nary income up to the amount of the special depreciation allowance previously allowed or allowable.
Publication 946 (2017), How To Depreciate Property (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2017 Instructions for Form 4562 (IRS)
- Special depreciation allowance
Certain qualified property (defined below) acquired and placed in service after September 27, 2017, and before January 1, 2023, is eligible for a special depreciation allowance of 100% of the depreciable basis of the property.