Bonus Depreciation for Outdoor Lighting In March of 2011, the Internal Revenue Service (IRS) issued Revenue Procedure 2011-26, which provides guidance concerning the first-year depreciation deduction for new assets (bonus depreciation). The ruling defines the processes by which businesses may deduct as “bonus depreciation” a percentage of the cost of certain new equipment including energy efficient outdoor lighting fixtures. All such special depreciation is covered by section 946 of the Code (chapter 3). Indoor fixtures already have advantageous depreciation rules under section 179D of the Internal Revenue code as created by EPACT2005.
While the 100% depreciation provision expired at the end of the 2011 tax year, a 50% first year deduction is good for years to come.
To claim the bonus depreciation, the taxpayer must file Internal Revenue Form 4562 with its federal return.