Tax Bills Await Lame-Duck Congress

When lawmakers return to Washington, D.C., for a post-election lame-duck session, action on a number of lapsed tax incentives is expected to be at the top of the congressional to-do list. Among the provisions important to farmers and ranchers are those related to Section 179 small business expensing, 50 percent bonus depreciation, conservation easement donations and charitable deductions for food contributions.

Farm Bureau puts a priority on tax code provisions that give farm and ranch businesses the ability to deduct expenses immediately instead of having to depreciate them over time, says Pat Wolff, American Farm Bureau Federation tax specialist.

“Farming requires large investments in machinery, equipment and other depreciable capital, so farmers and ranchers place great value on tax code provisions that allow them to write off
capital expenditures in the year that purchases are made,” explains Wolff.

“Tax provisions that accelerate expensing and depreciation allow farmers and ranchers to better manage cash flow, minimize tax liabilities and reduce borrowing. The ability to immediately expense capital purchases also offers the benefit of reducing the record-keeping burden associated with the depreciation.”

Bill Headed To President?
Republican and Democratic leaders from both the House and Senate agree on the need to get an extenders bill on the president’s desk for his signature. Far less certain is how long the incentives will be extended. Bills passed by the House earlier this year would make a number of the provisions permanent, while the Senate was poised to take up legislation that would have extended all the expired provisions for two years, covering 2014 and 2015.

Farm Bureau supports making permanent long-standing tax provisions such as Section 179 small business expensing because Congress’ practice of extending important small business tax provisions for one or two years at a time makes it very difficult for farmers and ranchers to plan ahead.

American Farm Bureau contributed information for this article.

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