FEDERAL TAX UPDATES

SECTION 179 & BONUS DEPRECIATIONTWO TAX BREAKS TO JUMPSTART THE

ECONOMYADDED & INCREASED - ECONOMIC

STIMULUS ACT OF 2008EXTENDED - RECOVERY ACT OF 2009DOWN ECONOMY – BENEFIT ??

SECTION 179NOT A NEW BENEFIT9/11 INCREASED TO STIMULATE

ECONOMY$128,000 FOR 2008 – PURCHASES NOT TO

EXCEED $510,0002008 STIMULUS INCREASED TO $250,000 –

PURCHASES NOT TO EXCEED $800,000

SECTION 179 (CONT’D)QUALIFYING PROPERTYTANGIBLE PERSONAL PROPERTY USED IN

BUSINESSUSED OVER 50% FOR BUSINESSEQUIPMENT, FURNITURE, AIRPLANES,

SINGLE PURPOSE AGRICULTURAL BUILDINGS, LIVESTOCK, COMPUTER SOFTWARE

SECTION 179 (CONT’D)COST SEGREGATIONSPECIAL PURPOSE ELECTRICAL &

PLUMBING SEGREGATEDNEW & USED PROPERTY QUALIFYCAN NOT REDUCE INCOME BELOW ZEROCAN CARRYFORWARD TO FUTURE YEARSINCREASED AMOUNTS EXTENDED IN

RECOVERY ACT OF 2009

BONUS DEPRECIATION50% WRITE OFF YEAR OF PURCHASECAN DECREASE TAXABLE INCOME BELOW

ZEROCAN CREATE A NET OPERATING LOSSQUALIFYING PROPERTY–SIMILAR TO

SECTION 179MUST BE NEW PROPERTYNET OPERATING LOSS CAN NOW BE

CARRIED BACK FIVE YEARS – GET CASH NOW !!

FOR SMALL BUSINESSES WITH RECEIPTS LESS THAN $15,000,000

2009 RECOVERY ACT-INDIVIDUALS FIRST TIME HOME BUYER CREDIT - $7,500PASSED IN 2008 STIMULUS AS A 15 YEAR

LOANPERSONAL RESIDENCES PURCHASED

AFTER APRIL 9,2008 TO JULY 1, 2009TURNED TO A REAL CREDIT BY 2009

RECOVERYMUST BE PURCHASED IN 2009, PRIOR TO

12-1-2009INCOME LIMITATIONS - $75,000 S -

$150,000 MIR 2009-14 ALLOWS 2009 CREDIT ON 2008

RETURN

SALES TAX DEDUCTION-VEHICLESDEDUCTION FOR AGICARS, LIGHT TRUCKS, RECREATIONAL

VEHICLES,MOTORCYCLES PURCHASED 2009

UP TO $49,000 VEHICLE COSTAGI $125,000 S - $250,000 M

MAKING WORK PAY TAX CREDIT2009 & 2010 $400 S - $800 MREDUCED WITHHOLDING STARTING 4-01-

2009NO WITHHOLDING – CREDIT ON 2009

RETURN

FORGIVENESS OF DEBT INCOMEBANKRUPTCY & INSOLVENCY EXCLUDEDISCHARGE OF QUALIFYING FARM

INDEBTEDNESSDISCHARGE OF CERTAIN REAL PROPERTY

DEBTDISCHARGE UP TO $2,000,000 MORTGAGE

DEBT PRINCIPAL RESIDENCEDO NOT QUALIFY FOR EXCLUSION –

ORDINARY INCOME.