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Bonus Depreciation

A tax incentive allowing businesses to deduct a larger portion of an asset's cost in the year it's placed in service, rather than spreading it out over many years, thereby reducing their taxable income more quickly.

Depreciation

An accounting method that allows a business to deduct the cost of a tangible asset over its useful life, rather than expensing the entire cost in the year it was purchased.

Adjusted Basis

The original cost of a property, plus the cost of improvements, minus any deductions taken for depreciation.

Recapture

A tax rule that requires a taxpayer to report as ordinary income (rather than capital gains) a portion of the gain from the sale of an asset, often relating to previous deductions taken, such as depreciation. In this bill, it means paying back the tax benefit if the property stops meeting certain conditions.

Internal Revenue Code (IRC)

The body of law that codifies all federal tax laws in the United States, administered by the Internal Revenue Service (IRS).

Dwelling Unit

A single place of residence, such as an apartment, house, or condominium.

Placed in Service