What’s New for 2011?

Stimulus Act Enhanced Section 179 Expensing
& Revived Bonus Depreciation Had been extended but only through 2011!  Take advantage of end of year dealer incentives with our finance program!  Just like paying cash, you keep your cash in your bank!

The expanded Section 179 expensing limit and bonus depreciation extension provide taxpayers with planning flexibility.

Section 179

Up to $500,000 of qualifying property may be expensed under Section 179 for taxable years beginning in 2009. This maximum amount is reduced dollar for dollar for investments of more than $800,000 in qualifying property. For taxable years beginning 2010, the Section 179 expense limit is reducued to $134,000, and the maximum deductible expense must be reduced dollar for dollar for investments of more than $530,000 in qualifying property.

Bonus Depreciation

Bonus depreciation equal to 50% of the adjusted basis of qualifying original use property may be claimed in 2009 for property placed in service before December 31, 2011   (January 1, 2012, for certain longer-lived and transportation property). Taxpayers may elect out of additional first-year bonus depreciation for any class of property. Consider the following:

• Taxpayers with a fiscal year-end beginning in 2009 can take advantage of the higher Section 179 limit of $250,000 through their fiscal year-end in 2010. However, taxpayers with fiscal year-ends beginning in 2009 will not be able to claim bonus depreciation for qualifying assets placed in service after December 31, 2009.
• Taxpayers who pay the alternative minimum tax (AMT) year after year should consider taking advantage of bonus depreciation to limit future additions to AMT income. When bonus depreciation is claimed for qualifying property, depreciation deductions claimed for the remaining 50% of the asset’s basis are not subject to the AMT depreciation adjustment. As AMT depreciation is less than regular tax depreciation in the early life of an asset, claiming bonus depreciation can reduce exposure to AMT in the early years after an asset is placed in service.
• Taxpayers who anticipate higher future tax rates in the near term should consider electing out of bonus depreciation and save the depreciation deductions to offset income taxable at higher tax rates.
• Although Section 179 depreciation is limited to the amount of a taxpayer’s active trade or business income, bonus depreciation can create a net operating loss (NOL). Taxpayers with significant asset purchases may be able to create an NOL, carrying the loss back and utilizing the cash from the related refund to help offset the cost of the assets. Alternatively, these taxpayers can elect to forgo the NOL carryback and use it to offset future taxable income subject to higher tax rates.
• Taxpayers can increase the Section 179 expense limit in 2010 by taking advantage of the energy-efficient commercial building deduction. The deduction is not limited by Section 179 thresholds. Generally, systems such as interior lighting, water, HVAC or other parts of the building envelope are eligible for the deduction.  This includes Metal Buildings as well.  Especially for farming and the entire Ag Industry, this is a great way to take advantage of this deduction.

Priority Financial Group/Priority National Leasing  offers you the finance program that qualifies for the 2011 expense deduction.   

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(800) 935-1048

Because we know money doesn't grow on trees!

We are just a phone call away from obtaining the equipment that your farm or ranch may need to keep up with the changing industry. From tractors to irrigation systems, we have the ability to finance any type of equipment, new or used.  And our latest addition to our financing programs, Medical & Dental professionals! Contact Us Today!