Congress Passes Business Investment and Credit Benefits

What this means: 1. 50 percent “bonus” depreciation is expanded though 2010, allowing business owners to depreciate half of the cost of capital equipment purchased and placed in service during 2010. The remaining basis of the asset is then depreciated under the regular depreciation rules. 2. “Section 179” expensing is expanded. In 2010, those write-offs are limited to $250,000 and are phased-out at $800,000. This bill increases the thresholds to $500,000 and $2,000,000 for 2010 and 2011. Certain leasehold improvement property, restaurant property, and retail improvement property qualify for this benefit. 3. Unused general business credit carryback is expanded from one to five years. This applies to general business credits for those sole proprietorships, partnerships, and non-publicly traded corporations with $50 million or less in average annual gross receipts for the prior three years. Those general business tax credits are also exempted from the Alternative Minimum Tax (AMT) under the bill. 4. The availability of credit for business is expanded. Under the bill, Small Business Administration (SBA) 7(a) loan limits are increased from $2 million to $5 million and increases the government guarantees on those loans from 75% to 90%. In addition, SBA 504 loan limits are increased from $1.5 million to $5.5 million, and microloans from $35,000 to $50,000. Fees on 7(a) and 504 loans are eliminated through December 31, 2010. The bill also increases 7(a) Express Loans from $300,000 to $1 million to provide access to working capital for small businesses. .