When should I not use the 50% bonus depreciation on property put into use the first year of the business?

[JulieCo · Accepted solution]

50% bonus depreciation rules allow the business to record half of the asset value as an expense in the first year of use and then depreciate the second half over the remaining life of the asset.  Therefore, businesses like to take advantage of bonus depreciation in years where their profit is higher -- meaning that this year's profit will probably be higher than next year, etc. -- so the bonus depreciation will reduce the amount of taxable profit for the business.  But, note, that the option to take the 50% bonus depreciation is only available in the year of purchase.  Therefore, one cannot decide to "delay" the 50% bonus as that is not an option. 

Businesses more than likely would opt to "not" take the bonus depreciation in year's they are experiencing a loss or when there is not enough profit to cover the 50% bonus depreciation amount.