Take Advantage of the 2013 Investment Incentives Before Year’s End

Industry members have until the end of this month to benefit from the strong 2013 investment incentives of 50 percent bonus depreciation and a $500,000 expense allowance. Both incentives could benefit purchasers of horses, farm equipment and most other depreciable property. Below is a summary of each incentive:

Bonus Depreciation – allows taxpayers to write off 50 percent of the cost of new qualified depreciable property if the property is purchased and placed in service before 1/1/2014. Property is considered new if its original use commences with the taxpayer. Yearlings and new tractors, for example, may qualify for this incentive.

Expense Allowance – allows taxpayers to write off the cost of new or used qualified depreciable property, up to $500,000, if the property is purchased and placed in service before 1/1/2014. The expense allowance is reduced dollar for dollar once qualified investments exceed $2 million. In addition to yearlings, broodmares and horses of racing age may qualify for this incentive.

Bonus depreciation and the expense allowance may be used together in some situations. For more information on how to best apply these incentives to your business, download this investment incentive flyer and consult a tax professional.

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