Vineyard and orchard owners get unexpected, last-second federal tax break from Congress

Congress handed vineyard and orchard owners an unexpected tax break yesterday when the newly passed bill included a last-second provision allowing rootstock and fruit-tree saplings to be fully depreciated in the year they are planted.

 

The provision is seen as an incentive to plant, and a way to financially bridge the lack of income in the time span between planting and first crops.

 

 

According to a document sent to Wine Industry Insight late yesterday from nursery owner John Duarte,  the new tax bill allows 100% bonus depreciation for plants planted after Sept. 27, 2017 and before January 1, 2024.

 

Depreciation was previously 50% in the first year. The bonus deduction is gradually phased out.

 

Details are still sketchy because this was apparently a last-second amendment. More details on the financial impact on financial rates of return will be published by Wine Industry Insight as they happen. The bottom line, according to Duarte, is that the provision creates an incentive to plant.