October 31, 2018 The Tax Cuts and Jobs Act changes how farmers and ranchers depreciate their business property. Here are changes to depreciation that affect farmers: New equipment and machinery is five-year property. Used equipment remains seven-year property. The 150-percent declining balance method is not required for property used in a farming business and placed in service after December 31, 2017. New and certain used equipment purchased during the tax year qualifies for 100 percent first-year bonus depreciation. Businesses that elect out of the interest deduction limit must use the alternative depreciation system to depreciate any property with a recovery period of 10 years or more.
