Will 100% Bonus Depreciation Get Extended?
You may know by now that 100% bonus depreciation will be reduced to 80% bonus depreciation beginning January 1, 2023. We have now had 100% bonus depreciation for almost five years (since September, 2017) and most farmers have taken full advantage of it especially the ability to deduct the purchase of used farm equipment.
Now 80% is still a pretty good deal, but it is not 100%. There is quite a bit of chatter about extending 100% bonus deprecation until December 31, 2025 and then have it drop to zero. The assumption is if it is 100%, then zero, that Congress will extend it each year as part of an extenders bill.
We are not sure if this will happen, but we do know it will be debated in the lame-duck session that will happen before year-end. We will keep you posted.
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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