Tax changes for farmers

[The Straight Story]

Tax changes for farmers

The new stimulus legislation makes more than 300 changes to the existing IRS code. Two of the most notable changes that will affect agriculture are an extension of special or bonus depreciation and an increase in the section 179 deduction.

The 50 percent special or bonus depreciation provision expired at the end of 2008. The new legislation extends the time period for 50 percent bonus depreciation to include qualifying property acquired and placed in service in 2009. The new legislation also extends 50 percent bonus depreciation through tax year 2010 for property with a recovery period of 10 years or longer, transportation property and certain aircraft.

The section 179 deduction limit was scheduled to be $133,000 with a qualifying property limit of $530,000 for tax year 2009. The new stimulus package changes the maximum section 179 deduction to $250,000 with a qualifying property limit of $800,000 for tax year 2009.

One additional issue the stimulus legislation modified was the carry-back period for a net operating loss. Typically, the carry-back period for a net operating loss is two years. The stimulus package allows a qualifying entity to carry the net operating loss back up to five years. This carry-back provision only would be eligible for a net operating loss incurred during tax year 2008.

http://www.agweek.com/articles/?id=2907&article_id=13828&property_id=41

No opinion on this, just tossed it out there for our farmer friends who read DU and maybe for someone of more knowledge about this to explain more fully what it means :)