Less Than Four Months to Get New Farm Buildings Finished
Farmers who are in the process of constructing new farm buildings or are thinking about it now have less than four months to go if they want to take advantage of 100% bonus depreciation and deduct all of the cost on their 2011 tax return.
Remember, there is no loss limitations on this deduction unlike Section 179 and a net farm loss can be used to offset other income such as wages, interest, rents, etc.
Also, the building must be finished before the end of the year, not simply paid for. Usually an occupancy permit from the county should be sufficient to show a “in service” status. If the building is not finished until 2012, then the deduction will occur in 2012 and the it will be limited to 50%, not 100% (unless they change the rules).
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.
Hi Paul, Does this apply to office buildings on the farm? Are they considered “general purpose”? What about a farmer who built his office building in the city? Would any farm building be considered 39 year property?
Thank you for your help.