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Message: <blockquote data-quote="Fritz the Cat" data-source="post: 180666" data-attributes="member: 605">PG, I believe you are talking about IRS Section 179. If a business, not only farming, made some good money during a year they can direct expense an equipment purchase. Most people think the Section 179 deduction is some mysterious or complicated tax code.Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It's an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.Today, Section 179 is one of the few incentives included in any of the recent Stimulus Bills that actually helps small businesses. Although large businesses also benefit from Section 179 or Bonus Depreciation, the original target of this legislation was much needed tax relief for small businesses - and millions of small businesses are actually taking action and getting real benefits.Each calendar year this law was renewed and Obama would foot drag his signature until December 15th. That would explain your cousin waiting until Christmas to make a huge investment. Nothing illegal going on here. If an owner/operator has a good year then direct expense capital investments instead of depreciating them over a period of many years. Smart. Speaking for myself, I used IRS Section 179 three years ago because I sold a lot of animals and bought a JD 7330. Had I put it on a five year depreciation schedule that would have not been a good idea because this year my income is very low. Have nothing to sell. Again, IRS Section 179 isn't just for farming. It is for any business.</blockquote>

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