Recently, I came across an article written by Hal Vandiver for the Material Handling Industry of America regarding the current Economic Stimulus Package and its impact on asset-owning businesses. Mr. Vandiver described the initial benefit of this measure very well, including some mathematical analysis of asset purchases that occur in 2008 or 2009. Put simply, the continuation of Bonus Depreciation and increased Section 179 deductions as economic stimulation have a significant impact for companies able to take advantage of these measures. That said, there is a hangover looming in the distance of which these companies should be aware. That hangover is “depreciation recapture” caused by an artificially lower basis than would normally apply to these assets.
