Will We See 100% Bonus Depreciation in 2012?
We had a reader ask the following question:
“President Obama’s proposed Jobs Act includes an extension of 100% bonus depreciation through 2012 however 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 politician in Washington DC 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.
For the second question, the 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.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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