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Slide 43– New Law – 150% Declining Balance Method
Provision 13203
Modifications of Treatment of Certain Farm
Property
New Law – 150% Declining Balance Method
150% declining balance method
• No longer required for 3, 5, 7 and 10 year farm
property (includes used property)
• Continues to apply to all 15 or 20 year property
when the straight-line method does not apply
• Continues to apply to property the taxpayer elects
to use 150% declining balance method
Applies to property placed in service after Dec. 31,
2017, in taxable years ending after this date.
Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 43
Slide 44 – Example 1: 150% Declining Balance Method
Provision 13203
Modifications of Treatment of Certain Farm
Property
Example 1
150% Declining Balance Method
A farmer purchased used 10-year property on May 30, 2017. The farmer
placed the property in service on February 1, 2018 in the farming
business.
The taxpayer placed the property in service after December 31, 2017,
therefore, the taxpayer is not required to use 150% declining balance and
may use another permissible method to depreciate the 10-year property.
Note: This example does not consider depreciation deduction rules (e.g.,
IRC 179 and bonus depreciation) discussed earlier. The emphasis here is
the proper depreciation method allowed under the new law.
Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 44
Student Guide TCJA – Depreciation Provisions
73083-102 A-22 05/2019
