Houses Passes Permanent Depreciation

WASHINGTON, D.C. (July 11, 2014) -- Today the House of Representatives passed H.R. 4718, a bill that amends the Internal Revenue Code to make permanent 50% bonus depreciation for qualified property purchased and placed in service after December 31, 2013.  The House also recently voted to permanently increase the expense allowance to $500,000 (with a $2 million investment threshold), up from the current level of $25,000 ($200,000 threshold).

Bonus depreciation expired and the expense allowance dropped at the end of 2013.

Bonus depreciation applies only to new business property such as a yearling.  The expense allowance applies to both new and used property.  Examples of used property include broodmares and horses of racing age.

The House also is considering the expired three-year depreciation schedule for racehorses but this provision is pending.

The Senate will address tax extender legislation for numerous business tax provisions, including those above, that expired or reverted to lower levels at the end of 2013.

The NTRA Legislative Team anticipates that these expiring tax provisions will be addressed in a single piece of legislation after the November elections and is focused on securing a favorable outcome for the industry.