Adjustment for Bonus Depreciation
On December 19, 2014, President Obama signed into law theTax Increase Prevention Act of 2014(TIPA), which extends 50% bonus depreciation for property placed in service in 2014. The North Carolina General Assembly did not adopt the bonus depreciation provisions under Internal Revenue Code ("Code") sections 168(k) or 168(n)
For taxable year 2014, individual taxpayers are required to add to federal adjusted gross income and corporate taxpayers are required to add to federal taxable income 85% of the amount allowed as a bonus depreciation deduction under section 168(k) or 168(n) of the Code for property placed in service during the tax year. This adjustment does not result in a difference in basis of the affected assets for State and federal income tax purposes.
Note:An individual deduction is allowed for taxable years beginning on or after January 1, 2015, for the amount of bonus depreciation added to an individual’s federal adjusted gross income on the 2014 State income tax return. Similarly, a corporate deduction is allowed for taxable years beginning on or after January 1, 2015, for the amount of bonus depreciation added to the corporate federal taxable income on the 2014 State income tax return. The deduction may be taken in five equal installments over a five-year period beginning with the tax year subsequent to the year of the addition. (SeeBonus Asset Basisfor impact of the transfer of an asset with remaining bonus depreciation deductions.)
Adjustments for Bonus Depreciation