I M P O R T A N T  T A X  A L E R T
(for U.S. Taxpayers only)

Recent tax legislation has given manufacturers a VERY BIG
incentive to purchase and install new equipment in 2011:

	Any and all new equipment purchased and installed before December 31, 2011 can be deducted for income tax purposes in full in 2011: (100% BONUS DEPRECIATION THROUGH 2011)

Here’s how this new tax provision works for a
typical manufacturer or fabricating contractor:

Let’s assume that ABC Custom Metal Fabricators, Inc. retools their facility in 2011 with NEW equipment totaling $800,000. Under the new law, ABC can write off 100% -- all of the $800,000 -- of the value of the asset in the first year, saving over $ 280,000 in federal and state corporate income taxes, or possibly more for subchapter S corporations depending upon the federal personal tax brackets and state personal income tax rates applicable to the S corporation shareholder/owners. Consult your tax adviser for specifics. In addition, there are new rules applicable to the purchase of used equipment – please consult you tax advisor to see if these benefits may apply to your situation or your project.

Note: The new equipment must be installed prior to December 31, 2011 to qualify for the 100% Bonus Depreciation. Bonus Depreciation on new equipment purchases drops to 50% for 2012.

 

PS:  If the 100% Bonus Depreciation on new equipment in 2011 causes a Net Operating Loss for your corporation in 2011 this loss can be carried back two years
(and forward if necessary 20 years) to recoup income taxes paid in prior years. Again, please consult with your tax adviser for specifics.