Tax Updates - Agricredit-dll.com

Agricultural Dealers

Agricultural Equipment
- Payment Estimator
- Customers
- Dealers
  - Tax Updates
  - Premier Service
  - Becoming a Dealer
  - Retail Financing
  - Floor Plan Insurance
  - Physical Damage Insurance
  - Rentals
  - Sales Tools
- Manufacturers
Golf & Turf Equipment
- Customers
Construction Equipment
- Light Construction
- Heavy Construction

The Economic Stimulus Act Includes Tax Breaks for Some Machinery Purchases

2010 Tax Update (Always consult a qualified Tax Advisor)

Many of the tax incentives that were in effect for 2009 have expired. Most have not been carried-over to 2010.

Bonus Depreciation (for Agricultural Equipment) was not carried over. Agricultural equipment purchased beginning in 2010 will no longer have a Bonus Depreciation option

Note: Congress did carry-over Bonus Depreciation for other types of equipment, but Ag didn’t make the cut.

Section 179 benefits were significantly reduced

	2009	2010
Acquisition Limit:	$ 800,000	$ 530,000*
Standard Allowance:	$ 250,000	$ 134,000	(Standard Section 179 deduction)

* Maximum asset amount the business can acquire during the taxable year. Acquisition amounts over $ 530,000 are subject to penalty. For every dollar over the acquisition limit, an equal amount must be subtracted from the allowance amount. For example, if the business acquires $ 600,000 in equipment, that’s $ 70,000 over the limit. Therefore, the same amount ( $ 70,000 ) must be subtracted from the allowance amount:

Initial allowance:	$ 134,000
	- $ 70,000
Effective allowance:	= $ 64,000

5-year Ag Depreciation Schedule

Prior to 2009, the standard depreciation schedule for agricultural equipment was 7-years. This had been true for many years. In 2009 Congress allowed a 5-year Ag schedule to be put in place. It was scheduled to expire at the end of 2009.

Many in the Agricultural Equipment industry expected Congress to carry-over this benefit to 2010. To date, Congress has not done so. It’s possible Congress could suddenly change it. There have been late-breaking discussions and speculation that the 5-year Ag depreciation schedule might still be carried-over into 2010, or that sometime in early 2010 (February or March), Congress might carry-over the 5-year schedule (retroactively).

If Congress does elect to carry-over the 5-year Ag depreciation schedule to 2010, this site will be updated accordingly. However, at this writing, the 7-years Ag depreciation schedule is now in effect.