Are you planning any year-end purchases to make your farm more efficient? You can calculate your potential depreciation deduction with our tax calculator.
Buyers can deduct 50 percent bonus depreciation on qualified new equipment purchased and placed in service by December 31, 2013. After December 31, this incentive will expire unless Congress reinstates it.
Another popular incentive that is scheduled to be lowered is Section 179 of the Internal Revenue Code. If elected, it allows a deduction of up to $500,000 with a $2 million investment limit for 2013. However, these limits are scheduled to drop to $25,000 with a $200,000 investment limit in 2014.
“Buyers should keep in mind that while the Section 179 deduction is eligible for both new and used equipment, the 50 percent bonus depreciation only applies to new assets,” says Terry Miller, Manager, Marketing and Communications, CNH Capital. “It’s also important to know that, if elected, the Section 179 deduction has to be claimed before bonus depreciation.”
If you’re planning to purchase equipment before the end of the year, talk with your tax professional to see how you can take advantage of these incentives, and visit your local Case IH dealer to see what equipment might still be available.
NOTE: CNH Capital and Case IH dealerships do not provide tax, legal or accounting advice. Customers are strongly encouraged to seek and consult their own tax professional advisors for advice on the proper tax treatment of these transactions.