Irrigation Systems – Is that 7 or 15 Years?
We got the following question:
“Can you blog about how irrigation systems and their components might be expensed or depreciated if purchased in 2014?”
Irrigation systems can be depreciated over either a 7 or 15 year period. The key rule regarding whether it is 7 or 15 years is based on whether the system is located above or below ground. The parts of the irrigation system located below ground (well, main lines, etc.) are depreciated over a 15 year period.
Irrigation components that are held above ground (pivots, wheel lines, etc.) are depreciated over 7 years. A drip irrigation system that is composed of both below and above ground components has been found to be 15 year property, even though part of it is above the ground.
Since all irrigation systems are 15 year or less property, it will qualify for both Section 179 and 50% bonus depreciation (assuming that tax extender bill passes soon).
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Your blog is great for irrigation System. It can be very useful for customers . I am also in irrigation business and I provide irrigation startups and winterization blow outs to keep your sprinkler system running at its maximum performance and keep pipes and sprinkler heads from cracking in Anoka, Andover, Coon Rapids, Blaine, Ham Lake, Champlin and Maple Grove. We can also install a custom irrigation system to your lawn. To know more information contact us: http://www.rickslawnandsnow.com/#!irrigation-services/zkwk6