North Dakota State University -- NDSU Agriculture Communication
7 Morrill Hall, Fargo ND, 58105-5655, Tel: 701-231-7881, Fax: 701-231-7044
agcomm@ndsuext.nodak.edu

March 28, 2002

Tax Law Change for Farmers: 30 Percent Bonus Depreciation

The Job Creation and Worker Assistance Act of 2002 has recently been passed by Congress. Under the legislation, 30 percent bonus depreciation is allowed on property acquired after Sept. 10, 2001 and before Sept. 11, 2004, according to a North Dakota State University agricultural economist.

The property must be new property with a recovery period of 20 years or less in order to qualify for the bonus, says Ron Haugen of the NDSU Extension Service. The 30 percent first year depreciation bonus is calculated after any 179 expense deduction.

The provision is retroactive to Sept. 11, 2001. If you acquired the property after Sept. 10, 2001 and before Jan. 1, 2002 and have already filed your 2001 income tax return, you may amend your return for a refund of taxes paid. You can use Form 1040X to amend your return, Haugen notes.

Additional information will be soon available from the IRS, including:

  • supplement to Publication 946, How to Depreciate Property
  • revised Form 4562, Deprecation and Amortization
  • new Publication 3991, Highlights of the Job Creation and Worker Assistance Act of 2002

Any questions should be addressed to your tax professional or the Internal Revenue Service at (800) 829-1040. Forms and publications my be ordered by calling (800) 829-3676.

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Source: Ron Haugen, (701) 231-8103, rhaugen@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu