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I have a farm rental. This year I will depreciate

I have a farm...

I have a farm rental. This year I will depreciate tiling...$106000. Does it qualify for special 1st year 50%/30% depreciation?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I have looked this up and know that tile would depreciate at 15 years and would qualify if we farmed it. My question is that it is income producing and the entire expense was paid in 2017. Does tile on a Schedule E qualify for the additional depreciation?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I don't think so.

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Answered in 16 minutes by:
3/26/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,212
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Under IRC §168, and Rev Proc 87-57, farm drainage tile is classified as tangible personal property and depreciated under MACRS with a 15 year life under the General Depreciation System (GDS) lives.

You can take 50% bonus depreciation (100% for assets placed in service after September 27, 2017). It is also eligible for IRC §179 deduction.

This can be taken on Sch F if an active farm, or on Sch E if it is rented land.

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,212
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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