Class Action

President Obama's Economic Stimulus Package--The American Recovery and Reinvestment Act of 2009: Summary of Selected Tax Provisions

By Michael J. Hassen

Marilyn Barrett, California Tax Attorney at Jeffer Mangels, Discusses Select Tax Provisions of President Obama's Economic Stimulus Package

Effective February 17, 2009, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 (otherwise known as the "Stimulus Bill"), $787 billion economic stimulus legislation which President Obama said marks a "major milestone on our road to recovery." Tax provisions account for over $288 billion of this amount. One of the author's partners, Marilyn Barrett -- a former chair of the Taxation Section of the State Bar of California and the Los Angeles County Bar Association and who works in the Tax Department of Jeffer Mangels Butler & Marmaro LLP -- assists clients on corporate and partnership tax matters and tax controversy matters, and serves as outside general counsel to mid-market public and privately held companies. Ms. Barrett has written and lectured extensively in the tax area, and has prepared an article addressing select tax provisions of the Stimulus Package. The first section describes business tax incentives, the second section describes energy-related tax incentives, and the third section describes tax provisions affecting individual taxpayers Several non-tax provisions have also been included.

Extension of Bonus Depreciation IRC § 168(k) allows additional depreciation in the first year certain assets are placed in service equal to 50% of the basis of the property (referred to as "bonus depreciation"). Bonus depreciation is allowed for both regular tax and the AMT. Property eligible for bonus depreciation is (i) MACRS property with an applicable recovery period of 20 years or less; (ii) water utility property; (iii) computer software (other than purchased software); or (iv) qualified leasehold improvement property, the original use of which commences with the taxpayer. Bonus depreciation expired at the end of 2008 except for certain transportation property which has an expiration date of December 31, 2009.

The Stimulus Bill extends the expiration date for one year to the end of 2009 and through 2010 for the transportation property.

Full post as published by Class Action Defense Blog on March 24, 2009 (boomark / email).