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Loverofblues - REBEL MEDIA: So I have a sign in my yard - Quincy, IL News - QuincyJournal.com
35 years for teaching.
cih8920 - Despite record yields for farmers, Titan\'s Taylor sees down year for tires in 2015 - Quincy, IL New
Titan tractor tires have a very poor track record in the last few years and it is evidently starting to show up in Titans pocketbook.
RUHEARINGVOICES - Illinois Early Voting starts: Cook County ballot box tries to cast GOP votes for Democrats - Quincy,
...and in Adams County I was required to show a photo ID to vote early even though the statute was amended effective July 1st to eliminate that requirement for 2014 only. http://www.ilga.gov/legislation/ilcs/fulltext.asp... middle of para (b).
CoolEdge - Despite record yields for farmers, Titan\'s Taylor sees down year for tires in 2015 - Quincy, IL New
370-400 bushels per acre? National average is supposed to be a record at 172, but are they making 370 even in the irrigated bottom ground? We had lotsa rain and a lot of double ears filled out ... but the average is only 10 bushels higher. Of course most of those extra bushels are probably sold at $3, and they are looking at under $3 next year. Most farmers already made a lot of purchases with…
CoolEdge - REBEL MEDIA: So I have a sign in my yard - Quincy, IL News - QuincyJournal.com
Ellington is concrete, doesn't seem "temporary". If the roof is an issue, put some pretty metal gabled roofs over the thing. HVAC is the issue? ... how can it be more for new units than a new building with new HVAC? They could even add a new building behind the old(er) building. The best sales point to me is in attracting industry to the area, which wants to attract individuals, who want good…

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Will Congress fix depreciation?

6 months ago from DTN AgDay

Anticipate that most of the items in the "tax extender" package will be renewed

QUESTION

What do you think the chances are for Congress to extend the 50% bonus depreciation another year? I am trying to make a decision on constructing a $100,000 machine shed. I am going to have a high-income year from liquidating a cow-calf herd, and the $50,000 deduction would be helpful. I need to move now on the machine shed decision and cannot wait for Congress on this for many more months. Or should I forego the needed shed to purchase other machinery that would be eligible to use against the Section 179 expected increase?

ANSWER

Your question is the classic illustration of how congressional inaction can paralyze business decisions. We are one-third of the way through 2014, and we still do not know what the depreciation rules are for this year's asset acquisitions!

We anticipate that most of the items in the "tax extender" package will be renewed. But these first-year depreciation deductions are less certain because they represent temporary incentives that Congress was using to spur a recessionary economy. Our expectation coming into 2014 was that Congress would finally let the 50% bonus expire, and scale back the first year Section 179 deduction to its pre-recession level. With inflation indexing, that would bring the Section 179 deduction to about $145,000. If this is the outcome in the tax legislation, there would be no 50% bonus for your new shed, and as a general-purpose building it is ineligible for Section 179. Your depreciation would be spread over a 20-year recovery period.

However, the Senate Finance Committee recently moved forward on renewing the 50% bonus for new assets for 2014 and the continuation of the $500,000 Section 179 deduction. But it's early in the process; this legislation hasn't yet moved to full Senate passage. And of course it also needs to pass the House, where spending concerns and the size of the deficit are occasionally acknowledged. So, long story short, it is probably a toss-up as to whether the 50% bonus gets renewed. I would be more optimistic about a larger Section 179 amount, as that deduction is only available to smaller businesses and does not have the budgetary cost of the 50% bonus deduction.

And finally, a business thought. Your question described the machine shed as a needed improvement. If so, you should put that improvement ahead of machinery acquisitions that might be more driven by their depreciation benefit. In the big picture, this is only about the timing of the deductions. You should really focus primarily on what is most important for the efficiency and growth of your business, with the taxes as a secondary aspect.


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