50% of the cost of qualifying property is allowed for certain property acquired after December 31, 2007 and before January 1, 2011 A nearly identical allowance was available for property acquired after September 10, 2001 and before 2005. The IRS recently issued guidance clarifying when taxpayers are eligible for 100 percent bonus depreciation. In addition, the guidance provides procedures for electing 100 percent bonus depreciation and 50 percent bonus depreciation for certain property. In addition to extending the availability of bonus depreciation in general, the Tax Relief Act provided for a new 100 percent depreciation deduction for qualified property that is acquired and placed into service by the taxpayer between September 8, 2010, and January 1, 2014. Special rules have also applied for bio fuel, recycling, and disaster assistance property. Decoupling modification is a tax terminology resulting from the federal tax law enacted March 9, 2002, which created a new tax deduction for "bonus depreciation" that threatened to cost states very large amounts of revenue. Federal Bonus Depreciation, Section 168(k) of the Internal Revenue Code, allows the acceleration of depreciation on federal tax returns, for example, writing off a higher amount of depreciation for the first year an asset goes into service. States that refuse to accept this method of calculating depreciation for state taxes, for example, Iowa and Maryland, publish forms with instructions so stating. Alternative depreciation system Certain assets must be depreciated under the Alternative Depreciation System (ADS), using specified lives and the straight line method. It may be applied at the election of the taxpayer in lieu of regular depreciation, and it must be used for the following types of property: Listed property used 50% or less in a qualified business use. Any tangible property used predominantly outside the United States during the year (subject to certain exceptions). Any tax-exempt use property. Any tax-exempt bond-financed property. All property used predominantly in a farming business and placed in service in any tax year during which an election not to apply the uniform capitalization rules to certain farming costs is in effect. Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. In addition, the ADS must be used for computing depreciation deductions for the Alternative Minimum Tax. ADS lives are the same as regular depreciation lives for a few classes, but