@ndc24075 wrote:
without Section 179, the depreciation amount would be $20,000 annually. In light of this, does it mean that with Section 179, the depreciation on the $100,000 assets, within the state conformity, can be $45,000 ($20,000 + $25,000)?
Will my company be allowed to take section 179 deprecation state maximum $25,000 on the assets (that is, total depreciation of $45,000)?
While I can't state for certain that Maryland does it this way, I would THINK the same methodology would be used as how Federal does things when it hits the limit:
1) With $100,000 of assets and $25,000 of Section 179, that leaves $75,000 in depreciable Basis. So using straight-line depreciation, that is $15,000 per year. But the first year usually only gets 1/2 of that (and the other 1/2 happens on the 6th year). But yes, that is added to the $25,000 for the first year.
2) No, section 179 only applies for the year it was "placed in service". So for years 2 through 5, you will get $15,000 a year (if you are using straight-line depreciation, but I think TurboTax defaults to 200%DB "accelerated" depreciation which give high deductions in the early years, and lower deduction in the later years).
