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| Plowboy:
New or used, the optimal machinery trading strategy involves more frequent trading given the existence and capability of use (i.e., sufficient income) of Sec179. Machinery roughly depreciates at 10% per year (market, not tax depreciation). A farm with $1M of machinery could keep it's line up (spend $100K per year) and never have to pay a penny of depreciation. This is like having a law that allows all machinery for this guy to simply be expensed. So, would you agree that expensing capital items is an advantage over placing them on depreciation schedules? Put another way, don't you think you'd buy a little less fertilizer if you couldn't consider it a tax-deductible expense and had to put it on a depreciation schedule?
Terry Kastens, ag economics, K-State
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"Long run" and the life of an operation
