Qualified Disaster Zone Property Depreciation allowance
It is difficult to ignore the news lately on the weather channel. Snow storms have destroyed roof tops, and caused water damage. Is your business in a Federally declared disaster area? If so, you may qualify for a special depreciation allowance. The Qualified Disaster Zone Property Depreciation allowance is for property placed in service in federally declared disaster areas in which the disaster occurred before January 1, 2010. If the company you work for is in one of the states suffering, it may benefit you to make sure the depreciation software you use, has this allowance incorporated
A list of the federally declared disaster areas is available at the FEMA website at www.fema.gov. Your property has to meet certain requirements such as:
It is one of the following types of property.
Tangible property depreciated under MACRS with a recovery period of 20 years or less.
Water utility property.
Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS.)
Qualified leasehold improvement property (defined under Qualified leasehold improvement property on page 25).
Nonresidential real property and residential rental property.
You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date.
The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster.
The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date.
Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring before January 1, 2010.
For a full list of requirements visit http://www.irs.gov/publications/p946/ch03.html
