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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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I want to start farming in two years. It will take me two

Customer Question

I want to start farming in two years. It will take me two years to get everything in place. My question is, " can i take a deduction for all the expenses incurred during those two years while getting the farm ready in the year that i start farming".
JA: The accountant will know how to help. Please tell me more, so we can help you best.
Customer: what else do you need to know
JA: Is there anything else the accountant should be aware of?
Customer: no
Submitted: 24 days ago.
Category: Tax
Customer: replied 24 days ago.
What is taking so long?
Expert:  emc011075 replied 24 days ago.

Hi. My name is ***** ***** I will be happy to help you.

You can deduct up to 5K in start up expenses and 5K in organizational expenses in your first year of business/farming. It means that you have to get the farm up and running before you can deduct any expenses. But be careful not to spend too much. If you have more than 55K in start up expenses, you will not be able to deduct it in the first year, you will need to amortize it over 15 years.

Customer: replied 24 days ago.
That didn't answer my question. Can i deduct expenses that i incurred in 2015 and 2016 in 2017 (the year i start farming.
Expert:  emc011075 replied 24 days ago.

You can deduct the start up expenses in your first year of business.

Star up expenses include all expenses you had BEFORE you started your business. It does not matter how long it takes you get your farming business ready, you can deduct 5K of start up expenses and 5K of organizational expenses in the year you are ready to generate revenue.

Expert:  emc011075 replied 24 days ago.

How much you will be able to deduct in 2017 will depend on type of start up expenses and the amount. If you spend more than 55K before your farming business is ready, you will not be able to deduct anything in 2017, you will have to amortize it all over 15 years (deduct 1/15 every year for the next 15 years).

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