• Lonnie
• April 9, 2013

My dad bought a property listed as residential in 2011.It included a house a barn and some other small buildings. In 2012 he began farming his property with crops and animals. I read that the 50% bonus depreciation may be eligible for property converted from personal to farm use. Under what conditions can the deduction be legal.

• Wes
• April 9, 2013

Paul, I have purchased 15 cow calf pairs. Do I depreciate them as a group, or do I depreciate them as individual animals? I am only talking about the cows, not the calves. I plan to keep most of them, but may sell some if they are not meeting my breeding needs. It sounds like it would be best if they were depriciated individualy, but it also seems like a lot of paperwork that may not be needed.

• Paul Neiffer
• April 17, 2013

You can go either way. usually, we set them up as a unit and if you sell some, you back out the amount sold. You can also make an election to just depreciate them as a unit and ignore the sales.

• dean
• February 3, 2013

Paul,
Can you tell me the positives and negatives of a disclaimer trust on farmland in MN?? Can a person still get homestead credit for the acres in the trust? I believe the limit is $1 million in the trust.

Thanks

• Jennifer
• October 15, 2012

Paul, My husband has a farm where he breeds cattle and sheep. He painted his barn and fences during 2011. Am I correct that this painting must be depreciated rather than deducted as a farm expense, and, if so, does this painting qualify for the bonus depreciation under section 179?

• Kyle Voydatch
• August 21, 2012

Thanks for putting in the time to write a great article!

• Kelly
• August 17, 2012

Paul,
I have been farming 635 acres for 4 years now on my own and also work for my family and get a wage. I want to put up a pole structure for housing equipment along with living quarters. Will this entire project be 100% deductible in 2012 if i get it done by the end of the year or will i only be able to deduct the storage portion? Thanks

• Peggy
• August 3, 2012

Paul
We recently sold 4.4 million of ranch land that we paid approximately 2 million for 8 years ago. We are planning to use the bonus depreciation as well as the 179 depreciation to our best advantage. At present, considering depreciation and other ranch expenses, we are looking at approximately a 500,000 tax liability IF we do not sell any livestock this year. Does an indoor riding arena qualify for one or both of these depreciation options? We are planning to buy quite a lot of new equipment, also. Thanks.

• Joe
• July 26, 2012

Paul,
I am working with a client who built a new cold storage facility in 2011. Am I understanding correctly (according to the info you provide above) that all building costs associated with this new facility should be eligible for 100% bonus depreciation? It has a fire pump room that does not contribute to daily operations–how would I account for this?

• Anne M Heminger
• July 25, 2012

Paul,
Thank you for your informative website and blog. I am merely a tax preparer and I benefit a great deal from this information — the Q & A is especially enlightening. You have really provided a valuable public service for farmers and their preparers. Thanks again!

• Jeff Williams
• July 23, 2012

Paul,
I have my property in Ohio set up as an s corp. I received $55,000 in bonus signing money for our gas lease on the property. My question is can I use bonus depreciation for 2012 on a building(Poultry/Horses)if its paid for by the s corp to offset this rental income on my 1040.
Thank you,
Jeff Williams

• Darla
• July 11, 2012

Thank you very much for your reply Paul. Our off-farm income is from self-employment. Because of this, are we still able to use our farm-income loss to reduce our taxable self-employment income? Thanks again!

• Darla
• July 5, 2012

Paul,
We have $1000 net income from the farm and $40,000 net from off- farm income. In 2011 we built a $10,000 barn and bought $25,000 worth of used farm equipment because we are going to expand farm operations. Am I permitted to depreciate $10,000 for the barn because of bonus depreciation but only $1000 because of the income limitation of section 179? So I would reduce our total taxable income by $11,000 for 2011? Great information, Thank you!

• Paul Neiffer
• July 8, 2012

Actually, you may be able to take Section 179 on the full used equipment value if your offfarm income is from wages. You most likely would not want to, but you may be able to.

• Candace
• June 21, 2012

Hi Paul,

I built a watermelon shed (single purpose) for my farm during 2012. Will it be eligible for bonus depreciation for 2012 and if so what amount? I’ve seen conflicting amounts through my online research but think it’s only 50% for 2012. Thanks for your help in advance!

• Paul Neiffer
• June 25, 2012

You are correct. It is eligble for 50% bonus depreciation in 2012, but not Section 179.

• Karen
• May 9, 2012

We have just purchased and are setting up a farm. We plan to build a new building to house farming items and supplies. For the future we aren’t so sure the building will always be a ‘farm’ building. How long does a building depreciated with 100% bonus depreciation have to stay as farm use?

• Paul Neiffer
• May 10, 2012

There is no bright-line date on this. Normally, as long as the original intent and purpose is for farming and you continue it for at least one full year after construction, you should be fine. Preference it longer.

• stuart leiter
• April 17, 2012

Paul,

can you take bounus depreciation on cattle?

• Paul Neiffer
• April 17, 2012

If they are “new” to breeding. Any cow that has been bred before will not qualify for bonus depreciation. Esstentially need to buy a heifer, etc.

• Rebecca
• April 17, 2012

On our 37+ acres, we raise goats (my husband works fulltime for another company). In October 2011 we built a barn for those goats and their hay. Can we deduct the 100% cost of building the barn using the bonus depreciation for out 2011 taxes? If so, where can I locate that info on the IRS site? Thank you.

• Linda Decker
• April 13, 2012

I believe after reading that I can take the 100% Bonus depreciation on the building. However, I constructed new sections of fencing for the pasture in 2011 and now I am wondering if I can also take this 100% Bonus depreciation on the fencing as well.

• Paul Neiffer
• April 17, 2012

It is all farm equipment and buildings that are new qualify.

• Linda Decker
• April 12, 2012

I have a small farm where we raise beef cattle, very small, around 35 cows and calves. In 2011 I bought a small storage building to keep feed, farm implements, etc., and it cost around $6500.oo. I have a job also and this is just another form of income. I file Schedule F on my tax return every year. My question is, can I take Section 179 this year on the building or what do I do?/

• Kia
• April 12, 2012

I am glad I came a cross this article. I am doing my father’s taxes and he started a beef cattle business this year and built a barn for that purpose. He did not make any income in 2011, but obviously hopes to in the next year. Does this mean he can deduct 100% of the cost of the barn this year? Even if he did not have ANY income at all??

• Paul Neiffer
• April 17, 2012

As long as he was in the farming business, it would qualify.

• boone
• April 9, 2012

I have a 40 acre farm. 15 acres were sharecropped farm with me until last year. I put the cropland into CRP. Will I be eligible to deduct depreciation in 2011? What other costs are deductible? CRP seeds, mowing (we hired that done)? Thanks for your help.

• Paul Neiffer
• April 11, 2012

You should be able to.

• Ray D
• April 5, 2012

Please explain barn buildings not eligible for 179 but are for bonus depreciation in 2011? Where does the bonus depreciation show up on the form? Do you just skip the 179 depreciation questions (software) and go to bonus? Thanks.

• Paul Neiffer
• April 7, 2012

Section 179 applies to assets with a IRS life of 15 years or less. Farm buildings have a IRS life of 20 years which is allowed for bonus depreciation, but not Section 179.