03/04/08 Tax time

It's tax time and once in awhile farmers, ranchers and horse owners need all the help we can get. I'm Susan Allen sitting in for Jeff who is out calving today and I will be back after the break with some potential new write-offs. The Economic Stimulus Act that President Bush just signed into law has two new tax incentives that give horse owners bigger write-offs. And&Those two incentives could mean a shot in the arm for those of us that own horses we use for breeding, ranch work or competition. The first increases the expensing allowances for horses purchased and placed into service in 2008 from $128,000 to $250,000. This expense also applies to farm equipment. Then there is the new bonus depreciation that brings back the 50 percent first year bonus for horses and depreciable property purchased and placed into service during 2008. One caution, it does not apply to property that has a depreciation life of over 20 years. Secondly, in the same manner as when this depreciation bonus was available in 2003 and 2004, the property must be new to it's purpose .The horse cannot have been used in that manner in the past, it's new use commences with the taxpayer. So as I understand it the bonus depreciation would work for well for young horses, say racing or cutting contenders. working ranch horses and possibly apply when you move a horse into breeding as well. But don't take my word for it check with your accountant.