Limits on capital expensing could affect farmers' capital purchase decisions
Farming requires large investments in machinery, equipment, and other depreciable capital. Such investments may be treated either as a current expense and deducted from gross farm income immediately, or capitalized and depreciated over time. For the past four years (2010-2013), if the cost was treated as an expense, the maximum deduction a farm could take was $500,000. Unless the 2010-13 expensing limit is extended, it will fall to $25,000 for tax year 2014.