Does the interest rate on financing affect the depreciation deduction?
No. The depreciation deduction is based on the cost basis of the asset, not the financing terms. Whether you get 0% dealer financing or pay 7% interest, the bonus depreciation deduction is the same. However, the interest rate does affect your overall return on investment and cash flow. At 0% dealer financing, your monthly payments […]
Can I claim the full deduction even if I finance the purchase?
Absolutely. This is one of the most powerful aspects of bonus depreciation. You can deduct the full purchase price of the asset in Year 1 regardless of how much you actually paid in cash. If you put 10% down and finance 90%, you still deduct 100% of the cost. For example, purchasing 10 games at […]