IMPORTANT POINT #6: The Bonus Depreciation is allowed for both regular and alternative minimum tax (AMT). There is no AMT penalty for taking the Bonus.

Now I assume you want the bad news - and there is some. If you write off $400,000 of a machine that cost $500,000 for 2008, you only have $100,000 to write off in future. However, if you follow a "bird in hand" philosophy, you may want to take the bucks while you can. In any event, any time you use this type of benefit, you have to stay on top of your tax planning in the future.

For example, should you sell a piece of equipment out of your fleet that has zero tax basis, the gain is 100% taxable at ordinary rates. If you normally had depreciation deductions to offset these gains, you didn't have to worry about it. But if you use Section 179 and Bonus Depreciation, you may not have the tax deductions you need to cover the gain. You could, of course, use a 1031 tax-free exchange to defer the gain, but that is a story for another day.

To use or not to use...
So, do you use the benefits or not? To make that determination, you need to know the following:

• How much equipment do you plan to buy in 2008?
• How much tax did you pay in the past two years, and at what bracket?
• What is your expected tax profits for 2008?

If you have a need for equipment and can take advantage of the tax benefits, it is worth investigating. If not, you don't have to use these temporary rules. The enticing interest rates alone may be enough to encourage you to make a purchase.

To help you assess the potential benefits for a given purchase, you can use the Stimulus Package Benefit Calculator found at the Associated Equipment Distributor's DepreciationBonus.org web site. Fill in the cost of the equipment being purchased and what you have available for Section 179 and the calculator will do the rest.