Depreciation in the farming industry
December 01, 2011
and Section 179 allowances expire at the end of this month, but farmers still have time to take advantage of the provisions, according to Farm and Dairy.
Phil Harris, tax specialist with the University of Wisconsin-Madison, notes that in order for a fixed asset
to be covered by the 100 percent depreciation rate, it must be new equipment. In the case of a new building, it must be fully constructed by the year's end to qualify for the deduction.
As the news source explains, "You can't just have the materials purchased and sitting on your property - it has to be standing and usable."
Some purchases might also qualify for a rapid write-off under Section 179, in which case farmers are responsible for weighing which deduction is most fitting for their circumstances. The news source offers the example of taking a 100 percent deduction under bonus depreciation this year, or claiming Section 179 and taking a portion of the depreciation in 2012.
Whichever they choose, farmers should be sure to educate themselves about the options to ensure they don't let tax-saving opportunities go to waste.