---
title: Bonus Depreciation vs. Straight-Line Depreciation  | LHPH Capital
description: There are two main methods of depreciation used in leasing, bonus depreciation being one of the most beneficial. Your CPA can help decide which method works best for you.
image: https://www.lhph.com/hubfs/LHPH_January2022/images/fed-income-tax-bonus-vs-SL.png
---

# CAPITAL FOR THE LHPH INDUSTRY

CREATING FINANCIAL FLEXIBILITY ONE DEALER AT A TIME

# BONUS DEPRECIATION VS. STRAIGHT-LINE DEPRECIATION

***Eyo Toe | November 23, 2021***

![fed-income-tax-bonus-vs-SL](https://www.lhph.com/hubfs/fed-income-tax-bonus-vs-SL.svg)

Federal income tax deferment is an advantageous benefit to having a leasing program. In 2018, the Tax Cut and Jobs Act gave LHPH dealers the opportunity to use bonus depreciation, the ability to depreciate 100% of used vehicle assets originated between now and 2023. After 2023 the 100% bonus depreciation will decrease 20% per year.

Straight-line depreciation is an alternative method to spreading your asset depreciation over a period of time. In the example above, the graph visually represents the differences between bonus depreciation and straight-line depreciation for one vehicle. Your CPA can help you decide with method of depreciation would be the most beneficial for your dealership.

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