Tax Relief for Cattlemen

In addition to death tax relief and increasing income tax and capital gains rates, the American Taxpayer Relief Act (ATRA) passed at the end of 2012 also included key provisions that are important to ranching families. 

Extension of Bonus Depreciation

ATRA extended 50 % bonus depreciation through the end of 2013. To be eligible for bonus depreciation qualified property must  be listed under the Modified Accelerated Cost Recovery System and have a recovery period of 20 years or less. This must be new property put in place prior to January 1, 2014. For more information, visit bonus depreciation

Expansion of Section 179

For 2013, ATRA extended Section 179 small business expensing up to $500,000 (adjusted for inflation) for a $2,000,000 purchase. After 2013, the expense level will decrease to $25,000 for a $200,000 purchase. Unlike bonus depreciation, property purchased under Section 179 expensing may be new or used. For more information on Section 179 visit deduction.

Credit for Conservation Easements

ATRA extended the provision encouraging contributions of capital gain real property for conservation purposes. ATRA amended the law to allow an individual a deduction for the grant of a conservation easement up to 50% of the individual’s adjusted gross income (AGI).  Any unused portion of the deduction may be carried forward for up to 15 years.  This was the law in 2011, but in 2012 it reverted back to a 30% AGI limitation and a 5-year carryover period.

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Kent Bacus
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