# Bonus depreciation

Expensing qualifying assets in year one instead of over their lives.

After a [purchase price allocation](https://searchspheresource.com/glossary/purchase-price-allocation), the equipment, vehicles, and furniture classes can often be written off immediately instead of depreciated over years, which turns part of the price into a first-year deduction and real cash. Under current law the first-year percentage is back at one hundred for qualifying property, but the boundary does the work: buildings, land, and [goodwill](https://searchspheresource.com/glossary/goodwill) never qualify, and goodwill amortizes over fifteen years instead. This is why buyers push allocation toward equipment, sellers push it away, and the schedule gets negotiated line by line. Model the year-one tax cash with your CPA before you price the deal's returns.

In numbers: A $4M asset deal allocating $400k to trucks and equipment can expense that $400k in year one under current law; at a 30% combined rate that is $120k of tax cash the same allocation pointed at goodwill would spread over fifteen years.

Source: https://searchspheresource.com/glossary/bonus-depreciation
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