The dust hasn't yet settled in Washington, D.C., but farmers can count on scoring some significant tax victories in legislation designed to avert the fiscal cliff. Chief among them are provisions renewing generous write-offs for equipment purchases and permanent exemptions that spare moderate-sized farm estates from federal tax.
Congress restored accelerated depreciation rules for 2012 and 2013 that should help crop producers shelter record incomes. (DTN file photo by Nick Scalise)"On a scale of 1 to 10, I'd definitely give it a 7," said Paul Neiffer, a CPA and partner in the agribusiness group of CliftonLarsonAllen who spent much of New Year's Day studying the bill now awaiting President Barack Obama's signature. "For the most part, terms are very favorable for agriculture compared to going over the cliff."
One major surprise was a generous renewal of Sec. 179 and bonus depreciation rules that have allowed high-income farm operations to shelter sizable incomes in recent years. The bill extends 50% bonus depreciation through the end of 2013. It also hikes Sec. 179 deductions to the old 2010/2011 level of $500,000 for 2012 and 2013. Without the change, Sec. 179 would have been $139,000 for 2012 and reverted back to $25,000 in 2013.
Source: DTN /Progressive Farmer