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by Jeffrey Taylor
Fall 2002 issue

In the United States, a corporate taxpayer recovers, through annual depreciation deductions, the cost of certain property used in a trade or business. The amount of the depreciation deduction is determined under the modified accelerated cost recovery system (MACRS). Under MACRS, different types of property receive congressionally mandated recovery periods and depreciation methods. Before this new tax provision was enacted, lessors thought bonus depreciation would help leasing. Now, in a down economy, it turns out that whether it actually is a benefit depends on the tax life of the asset.