Thoroughbred industry members are positioned to benefit from a recent law designed to accelerate economic growth through various tax benefits. In late December, President Obama signed the bill that authorizes and extends investment incentives.

Qualifying investments may include those in certain horses, farm equipment and most other depreciable property. The available incentives fall into two categories:  bonus depreciation and an expense allowance.

Bonus Depreciation

  • 100% bonus depreciation now in place
  • To qualify, property must be new (original use must commence with taxpayer)
  • Qualifying property must be purchased and placed in service after 9/8/2010 through 12/31/2011
  • Reverts to 50% bonus depreciation in 2012

Expense Allowance

  • $500,000 expense allowance
  • Applies to new or used property
  • Property must be placed in service in year purchased
  • Investment threshold is $2 million (allowance is reduced dollar for dollar once threshold is reached)
  • Effective through 2011

Read more here and consult your tax advisor for additional information.