Investment Incentives Expire Soon

Two major investment incentives for small businesses, including those in the Thoroughbred industry, are set to expire at the end of the year. The incentives permit write-offs of certain property with a depreciable life of 20 years or less.

  • Bonus depreciation is set at 100 percent through 12/31/2011. This incentive allows taxpayers to write off the entire cost of qualified new property that is purchased and placed in service before 1/1/2012. Property is considered new if its original use begins with the taxpayer. Examples of such property include yearlings and new farm equipment, fences and barns.
  • The expense allowance permits write-offs up to $500,000 for qualified new or used property.  Similar to the requirement for bonus depreciation, the property must be purchased and placed in service before 1/1/2012. An example of used property is a broodmare.

Although there are no investment limits with bonus depreciation, the $500,000 expense allowance is reduced by one dollar for every dollar spent over $2 million on qualified property.

Consult your tax advisor today to plan your investment strategy. Click here for more information.





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