The Tax Cuts and Jobs Act of 2017 (TCJA) includes several changes for farmers and ranchers. Here are a few related to depreciation and net operating losses.

New and used equipment purchased in the tax year qualify for 100% bonus depreciation (i.e. immediate write off). The old rule allowed write off of only new items.

More accelerated depreciation (called double declining balance) is available for 3-10 year property. The law repeals the 150 percent declining balance method.

New equipment has a five-year depreciable life, not seven like the old rule. But, used equipment acquired during the year still has a seven-year life.

Net operating losses before 2026 can be carried back by farmers for two years or carried forward indefinitely (rather than only 20 years like the old rule). But, the net operating loss can only offset 80 percent of income, not 100 percent like the old rule.

With over 20 years of experience in public accounting, Amanda Bechen CPA owns Bechen & Company PC located in Wagner, SD, and can be contacted at 605-384-4200 or www.bechenco. com.