jason
Well-known member
Anyone have any insight on this or have taken advantage of this tax law? We were looking at building an extra 40 x 60 this year and was interested in tax advantages of doing this.
"Now, in the case of bonus deprecation, as long as the building is a NEW building, the income limitation do not apply. Let’s take the case of the farm building costing $500,000 with net farm income after all other costs of $200,000. In this case, the farmer is allowed to take a full bonus depreciation deduction of $500,000 and show a $300,000 farm loss. If the farmer has no other income, they can carry the loss back two years to offset income in 2008 and 2009 and forward to 2011 and beyond until they use it up.
Remember on all new equipment, farm structures and farm buildings placed in service in 2011, the farmer can deduct 100% of the cost without worrying about the overall income of the farm operation. Also, make sure to review this with your tax advisor to determine if your structure is set up properly to allow the full deduction. If you are an S corporation and this bonus depreciation creates a loss greater than your available basis, you will not be allowed to deduct the full amount of bonus depreciation this year."
"Now, in the case of bonus deprecation, as long as the building is a NEW building, the income limitation do not apply. Let’s take the case of the farm building costing $500,000 with net farm income after all other costs of $200,000. In this case, the farmer is allowed to take a full bonus depreciation deduction of $500,000 and show a $300,000 farm loss. If the farmer has no other income, they can carry the loss back two years to offset income in 2008 and 2009 and forward to 2011 and beyond until they use it up.
Remember on all new equipment, farm structures and farm buildings placed in service in 2011, the farmer can deduct 100% of the cost without worrying about the overall income of the farm operation. Also, make sure to review this with your tax advisor to determine if your structure is set up properly to allow the full deduction. If you are an S corporation and this bonus depreciation creates a loss greater than your available basis, you will not be allowed to deduct the full amount of bonus depreciation this year."
