artp Posted November 15, 2008 Report Share Posted November 15, 2008 Farm client is wanting to take depreciation in 2008 for a used combine he will be purchasing. Assuming he has sufficient income from his farming operations, I believe he would be be able to use Sec 179 but would not be eligible for the new 50% bonus depreciation since the combine is used equipment. Correct? If he takes possession before 12/31/08 is that sufficient to meet the "placed in service" requirement? He may be taking delivery late in Dec and therefore would not be using the combine to harvest any crops in 2008. Would this jepordize taking the Sec 179 and regular depreciation in 2008? Could he then take it in 2009? Farmer is expecting substantial profits in 2008 and needs the deduction this year. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted November 16, 2008 Report Share Posted November 16, 2008 Farmers do not have to wait for the 'in service', once they have it in possession, they can start writing it off. Yes to §179 Quote Link to comment Share on other sites More sharing options...
OldJack Posted November 20, 2008 Report Share Posted November 20, 2008 Farmers do not have to wait for the 'in service', once they have it in possession, they can start writing it off. Yes to §179 Quote from 2007 Pub 225, "Farmers Tax Guide", page 36: >>Placed in Service Property is placed in service when it is ready and available for a specific use. whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Even if you are not using the property, it is in service when it is ready and available for its specific use. Example. You bought a planter for use in your farm business. The planter was delivered in December 2007 after harvest was over. You begin to depreciate the planter for 2007 because it was ready and available for its specific use in 2007, even though it will not be used until the spring of 2008. If your planter comes unassembled in De- cember 2007 and is put together in February 2008, it is not placed in service until 2008. You begin to depreciate it in 2008. If your planter was delivered and assembled in February 2008 but not used until April 2008, it is placed in service in February 2008, because this is when the planter was ready for its speci- fied use. You begin to depreciate it in 2008. << Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted November 20, 2008 Report Share Posted November 20, 2008 The 2008 version is out: http://www.irs.gov/pub/irs-pdf/p225.pdf taxbilly Quote Link to comment Share on other sites More sharing options...
artp Posted November 21, 2008 Author Report Share Posted November 21, 2008 Farm client is wanting to take depreciation in 2008 for a used combine he will be purchasing. Assuming he has sufficient income from his farming operations, I believe he would be be able to use Sec 179 but would not be eligible for the new 50% bonus depreciation since the combine is used equipment. Correct? If he takes possession before 12/31/08 is that sufficient to meet the "placed in service" requirement? He may be taking delivery late in Dec and therefore would not be using the combine to harvest any crops in 2008. Would this jepordize taking the Sec 179 and regular depreciation in 2008? Could he then take it in 2009? Farmer is expecting substantial profits in 2008 and needs the deduction this year. KC & OLD JAck Thanks for the quick reply. Sorry I did not respond sooner. Quote Link to comment Share on other sites More sharing options...
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