Members of the Thoroughbred industry investing in their businesses in 2012 may be able to benefit from the two incentives described below. Each of these is the result of legislation from 2010 designed to stimulate the U.S. economy.
Section 179 Expense Allowance – allows taxpayers to write off the cost of new or used qualified depreciable property, up to $125,000, if the property is purchased and placed in service before 1/1/2013. The expense allowance is reduced dollar for dollar once qualified investments exceed $500,000. For 2013, the expense allowance drops to $25,000 with a $200,000 threshold.
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 1/1/2013. Property is new if its original use commences with the taxpayer. Bonus depreciation expires for 2013.
The expense allowance and bonus depreciation may be used together.
For more information, download an investment incentive flyer and consult a tax professional to learn how these incentives may benefit your business.