Bonus Depreciation for Hospitality

Restaurant and hotel executives are always looking for ways to be innovative when contributing to their bottom line.  Who wouldn’t?  Both are expensive to build, maintain and run.  Both require an insane amount of fixed assets to operate.

We try and be pro-active with all the hotels and restaurants we encounter and work with them to identify and classify real property and personal property correctly through our engineering based cost segregation studies.  Through this process we are able to determine which personal property items qualify for bonus depreciation and can capture all associated benefits to greatly increase cash flow for other operating costs.

Bonus Depreciation Rates and Dates History

  • September 11, 2001 to May 5, 2003 — 30%
  • May 6, 2003 to December 31, 2004 — 50%
  • January 1, 2005 to December 31, 2007 — None
  • January 1, 2008 to December 31, 2009 — 50%
  • January 1, 2010 to December 31, 2010 — None — Still Pending Legislation

Their may not be a lot of differences in depreciating fixed assets for hospitality versus any other industry, there are however, more accelerated depreciation methods and lives for certain hospitality items — should you catch them on time.

Perhaps YOU should be looking into an engineering based cost segregation study so YOU can figure out which assets could qualify for bonus depreciation for hospitality.

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