Federal Bonus Depreciation
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FEDERAL BONUS DEPRECIATION

The state of Iowa will not couple with the Federal Bonus Depreciation and revised NOL Carrybacks.

Form IA 4562A should be used to compute Iowa depreciation on items where Federal bonus depreciation was claimed. The total adjustment for decoupling should be entered on line 14. Totals for lines 5, 6, 7, 10 and 11 should be the same as on the equivalent lines from the Federal 1040 and the total adjustment for bonus depreciation from IA 4562A on line 14.

Iowa did not couple with the provisions of this Act in the following two areas:

a. Bonus Depreciation

Iowa did not adopt the “bonus depreciation” provisions for assets placed in service on or after September 11, 2001. An adjustment will have to be made on form IA4562A to account for the difference between the Federal depreciation and the Iowa depreciation.

b. Net Operating Losses

Iowa did not adopt the provisions for the five-year carryback for net operating losses incurred in 2001 and 2002. Therefore, Iowa net operating losses will still be carried back two years, except for losses incurred in presidentially declared disaster areas (3-year carryback) and losses incurred by farm corporations (5-year carryback).