Questions from the field.(Taxing Matters)

Top Producer, November, 2003 by Biebl, Andrew R.

Q. I am retired and lease both farmland and machinery to my son. If I build a new machine shed, can I use some of the new bonus depreciation deductions?

A. The Section 179 first-year depreciation allowance (now $100,000) is not available for a general-purpose building like a machine shed. However, there is good news with respect to the 50% first-year bonus depreciation. Any new asset with a class life of 20 years or less gets the 50% front-end write-off. Farm machine sheds have a 20-year recovery period, so congratulations--the new machine shed will produce a 50% deduction when placed in service, with the balance then being written off over the usual 20 years. Note that the 50% bonus is only in the law through Dec. 31, 2004, so full speed ahead!

Q....

Read the rest of this article with a Free Trial at HighBeam Research.

Premium Content Partnership | HighBeam Research provides an in-depth online archive library of reference works.