Members of the Thoroughbred industry investing in their businesses in 2012 may be able to benefit from the two investment incentives described below. Each of these is the result of earlier legislation designed to stimulate the U.S. economy.
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 investment 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 in some cases. For more information on how to use these incentives for your business, download this investment incentive flyer and consult a tax professional.