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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Will We See 100% Bonus Depreciation in 2012?

Dec 12, 2011

A reader asked the following question:

"President Obama's proposed Jobs Act includes an extension of 100% bonus depreciation through 2012; however, it excludes qualified real property. Does this include farm buildings?"

 

First, I think there is a very good chance that we will see 100% bonus depreciation sometime in 2012. However, we are dealing with politicians in Washington, D.C., and this decision may not get made until after next year's election. This is what happened in 2010. For planning purposes, we currently have 100% bonus depreciation for 2011 and 50% for 2012. Those are the numbers I would use for now.

Second, qualified real property relates more to retail lease space and restaurant property, etc. All farm buildings have either a 20-year life or perhaps a 10-year life for structures such as a hog confinement building. Under the section of the code dealing with bonus depreciation, all assets with a life of 20 years or less qualifies for bonus depreciation. So the bottom line answer is that farm buildings would qualify under President Obama's proposal.

 

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