U.S. Inbound Investments Eligible for Tax Benefits
The 2010 U.S. Tax Relief Act provides tax incentives for foreign inbound investments into the U.S. for certain qualified capital expenditures.
Section 179 expensing allows businesses to quickly recover the cost of certain capital expenses by electing to write-off the cost of these expenses in the year of acquisition in lieu of depreciation over a period of time, typically five to seven years. Qualifying expenses for machinery, equipment and software are eligible for the Section 179 election. For 2011, an election to expense up to $500,000 of qualified capital expenditures is allowed with an investment threshold of $2 million. This benefit also extends to certain leasehold improvements.
In 2011, businesses are allowed to deduct the cost of qualified personal property placed in service during the year for a 100% bonus tax deduction.
While most states do not follow these favorable federal rules, clearly the accelerated deductions of Section 179 and/or bonus. depreciation can assist current operations in the U.S. or new foreign inbound endeavors.
For further information please contact international tax expert Dave Springsteen at HLB member firm WithumSmith+Brown, New Jersey.
Mr David A. Springsteen
WithumSmith Brown, PC
5 Vaughn Drive
New Jersey 08540
U S A
Phone: + 1 609 520 1188
WithumSmith+Brown is a member of HLB International. Founded in 1974, WithumSmith+Brown is one of the largest regional public accounting and consulting firms along the mid-Atlantic corridor. With corporate headquarters based in Princeton, the firm has additional offices in Cherry Hill, New Brunswick, Somerville, Morristown, Red Bank and Toms River, NJ; Newtown and Philadelphia, PA; New York City, NY; Silver Spring, MD; Aspen, CO; and West Palm Beach, FL. WS+B is also a member of HLB International, HLB International is a world-wide network of independent professional accounting firms and business advisors. With 375 employees, WS+B ranks among the top 40 CPA firms nationwide and in the top 10 in New Jersey.
For more information, please visit www.withum.com