Accelerated depreciation schedules currently in use
October 04, 2011
Horses and planes aren't typically associated with each other, but they do have one connection.
Thoroughbred owners can accelerate the depreciation
of their horses - an allowance Senate Minority leader Mitch McConnell says contributes billions to Kentucky's economy, according to The Wall Street Journal. Approximately 50,000 of the state's citizens are employed in the industry.
Earlier this year, President Barack Obama singled out a corporate jet tax break based on the same principle. Under the current legislation, companies are allowed to deduct the decline in the value of planes from their taxable income at a depreciation rate of five years instead of seven. By expediting the deduction of the decline in the jets' value from companies' taxable income, there is a greater incentive for them to buy new planes more quickly.
A provision of the American Jobs Act unveiled last month would lengthen the depreciation schedule
. The National Business Aviation Association has since released a statement that the proposal "seems directly at odds with the stated purpose of the proposed legislation, which is to create jobs."