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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.
With the large increase of Section 179 deduction for 2010 and 2011 to $500,000 and 50% bonus depreciation on new assets in 2010 and possibly 100% in 2011, it is now even more important for your tax planning to coordinate these two deductions.
Here are the important rules to remember:
Therefore, here are the general rules that you want to follow:
If you are placing a large amount of equipment in service in the last quarter of the year, this may make you subject to mid-quarter depreciation which might limit your deduction for the year. If this might apply, you may want to time your Section 179 deduction on your late in the year assets to maximize the overall depreciation expense for the year.
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