Decoupling modification: Difference between revisions

Revision as of 19:54, 14 November 2013

Revision as of 20:19, 18 January 2014

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'''Decoupling modification''' is a tax terminology resulting from the federal tax law enacted March 9, 2002, which created a new tax deduction for "bonus depreciation" that threatened to cost states very large amounts of revenue.<ref>{{cite web|url=http://www.ovguide.com/decoupling-modification-9202a8c04000641f8000000013a2d17b |title=Watch Decoupling Modification Video |publisher=Ovguide.com |date=March 9, 2002 |accessdate=November 13, 2013}}</ref>

Federal Bonus Depreciation, Section 168(k) of the Internal Revenue Code,<ref>{{cite web|author=John M. Wachowicz, Jr., Ph.D., CPA |url=http://web.utk.edu/~jwachowi/hr3090.html |title=Wachowicz's Web World - Special Report - Job Creation and Worker Assistance Act of 2002 (JCWAA) |publisher=Web.utk.edu |date= |accessdate=November 13, 2013}}</ref> allows the acceleration of depreciation on federal tax returns, i.e.fir example, writing off a higher amount of depreciation for the first year an asset goes into service.<ref>{{cite web|url=https://revenue-pa.custhelp.com/app/answers/detail/a_id/419/~/what-does-it-mean-to-decouple-from-federal-bonus-depreciation%3F |title=What does it mean to decouple from Federal Bonus Depreciation? |publisher=Revenue-pa.custhelp.com |date= |accessdate=November 13, 2013}}</ref> States that refuse to accept this method of calculating depreciation for state taxes, for example, [[Iowa]] and [[Maryland]], publish forms with instructions so stating.<ref>http://iowa.gov/tax/taxlaw/11SF512D.pdf</ref><ref>http://forms.marylandtaxes.com/current_forms/500dm.pdf</ref>

== Notes ==