The Dates for 100% Bonus Depreciation

We had a reader ask the following question:

“What is the date a farm building has to be built to be 100% tax deductible? Is this for one year (2011) or will it continue for more than the single year?”

We have done a couple other posts on this earlier this year and late last year, but it never hurts to communicate these very valuable dates to our readers.

If a farmer is constructing a new building and the construction commenced after September 8, 2010 and is finished before January 1, 2012, then the total cost is allowed to be 100% depreciated during 2011.  If the building construction commenced before September 9, 2010 and was finished in 2011, then only 50% bonus depreciation is allowed (unless you can segregate out some components that can be 100% bonus depreciated this year).

If the building is not finished by the end of 2011, but is completed in 2012, then the farmer can take 50% bonus depreciation on the building and depreciate the remaining 50% over its taxable life.

Currently, it is 100% bonus depreciation in 2011, 50% bonus depreciation in 2012 and zero bonus depreciation in 2013, but these rules can change at any time.