In 2014, taxpayer-unfriendly changes are scheduled for the election to expense (Section 179) and for bonus depreciation (Section 168(k)). For taxpayers contemplating purchases of machinery and equipment, these changes may motivate taxpayers to make their purchases in 2013, instead of 2014. In the context of acquiring business or income-producing tangible personal property, there are two taxpayer-friendly tax provisions that are scheduled to be curtailed in 2014:

(1) With regard to the election to expense (Section 179),

• In 2013, taxpayers can elect to expense up to $500,000.

• In 2014, taxpayers can elect to expense up to $25,000.

(2) With regard to bonus depreciation (Section 168(k)),

• In 2013, bonus (50%) depreciation is available.

• In 2014, bonus depreciation is scheduled to expire.

As 2013 winds down, taxpayers should review (1) the timing of their property acquisitions, (2) the concepts of election to expense (Section 179) and bonus depreciation (Section 168(k)), and (3) the distinctions between these two concepts.